Condo investment property warrantable loans question

4 Replies

Hello everyone,

I'm in California and I own a condo as an investment property that is part of a 3-unit condo with an HOA. I rent my unit out and the other units are owner-occupied. Right now all of us are fine since we meet the 51% owner-occupied guidelines for Fannie Mae and Freddie Mac in regards to warrantable loans.


If another unit decides to rent out his/her place we would obviously go below the 51% owner-occupied threshold. At that point, if one of the investment property owners decided to sell would prospective buyers (assuming the prospective buyer would live in the unit) qualify for a warrantable loan? Since in this case after the buyer purchases the unit it would be 2 units that are owner occupied and 1 unit that is an investment property.

Thanks in advance for your help.


@Aaron So if you own a condo in a 2-4 unit complex then the Fannie Mae condominium review is waived.  There is no review, thus no ownership requirement, for a condo complex of that size.

@Aaron So unfortunately Freddie Mac will follow the 50% unit occupied by owner rule.  So in your above scenario if another unit owner did decide to rent then that would fall below the 50% rule.   But having Fannie Mae as a servicer means you do have a warrantable condo to Fannie Mae.  Hope this helps!