How a First-Time Buyer Closed on a Non-Warrantable Condo in Portland With 10% Down

By Mitch Tugaw, Mortgage Broker, NMLS #1995083 · Mortgages With Mitch, Powered By Barrett Financial LLC

Quick answer: Yes, you can buy a non-warrantable condo in Portland, Oregon, even if the building is not approved for conventional or FHA financing. It takes a lender that offers non-warrantable condo programs, and it usually means a larger down payment and a different rate than a standard loan. We recently closed one for a first-time buyer with 10% down after the HOA failed the standard agency requirements.

The Situation: A First-Time Buyer, a Condo, and a Wall

This week's story starts the way a lot of first-time buyer stories do. A buyer found a condo in Portland that fit their budget, their commute, and their life. They were pre-approved, they were excited, and they had 10% saved for a down payment.

Then the condo project itself became the problem.

When we dug into the building, it did not meet the loan standards that conventional (Fannie Mae and Freddie Mac) or FHA financing require for condo projects. That is not a reflection of the buyer. Their credit, income, and savings were fine. It was a problem with the HOA and the project's profile, and no amount of strong borrower paperwork changes that on a standard loan.

For many buyers (and plenty of agents), this is where the deal dies. The usual advice is "find a different condo." But that is not always realistic when the right home, at the right price, in the right neighborhood is the one in front of you.

What Makes a Condo "Non-Warrantable"?

A condo is "warrantable" when the whole building meets the standards that Fannie Mae and Freddie Mac set for the loans they buy. A condo is "non-warrantable" when it falls outside those standards. The lender is not just approving you. They are also approving the building and the HOA.

Common reasons a condo project fails include:

• Pending or active litigation involving the HOA or the developer

• Low owner-occupancy, meaning too many units are rented or owned by investors

• One person or entity owning too many units in the building

• A large share of HOA dues that are delinquent

• Underfunded HOA reserves or major deferred maintenance

• Too much commercial space in the building

• Special assessments or other financial stress at the HOA level

If a project trips one of these, it can be ineligible for conventional financing, and FHA and VA have their own separate project approval rules on top of that. Which specific issue applied in this case is staying private, but the result was the same: standard financing was off the table.

How We Got This Buyer to the Closing Table

A non-warrantable condo loan is built around the project as much as the borrower. Here is how we approached it.

1. We confirmed the problem early. Before the buyer spent money on inspections and appraisals, we reviewed the HOA's condo questionnaire, budget, and project details to confirm exactly why the building failed standard guidelines. Finding this out on day 3 is very different from finding it out on day 25.

2. We switched to a non-warrantable condo program. Instead of forcing the deal into a loan that would never be approved, we moved the buyer to a lender program designed for condos outside agency guidelines. These are typically portfolio or non-agency products, and they set their own rules for what they will accept.

3. We set expectations on down payment and pricing. Non-warrantable condo loans often require more money down than a standard conventional loan, and the rate is often higher because the lender is taking on more risk. In this case, the buyer put down 10%. [Rate and loan amount range: see placeholders below.]

4. We coordinated with the agent and HOA. Non-warrantable condo deals require documents from the HOA that a standard purchase does not always need. Getting those requests out early, and staying on top of the management company, kept the timeline on track.

5. We closed. A first-time buyer who was told "this building can't be financed" is now a homeowner in Portland.

What Most Articles Get Wrong About Non-Warrantable Condos

Most national articles say non-warrantable condos are "nearly impossible to finance" or that you need 25% to 30% down. The truth is more nuanced.

Down payment requirements vary by lender and by what makes the project non-warrantable. Some programs ask for 20% or more. Some go lower for the right borrower and the right building. A 10% down payment on a non-warrantable condo is not typical, but it is not impossible, and it depends on matching the specific building to the specific program. This is exactly why working with a mortgage broker, who can shop multiple lenders instead of one, matters on a deal like this.

Also worth noting: a non-warrantable condo is not necessarily a bad condo. Many are perfectly well-run buildings that fail on a technicality, such as a temporary litigation issue or a high investor concentration in a small building.

Things to Check Before You Fall in Love With a Portland Condo

If you are a first-time buyer looking at condos in the Portland metro, ask your agent or lender these questions before you write an offer:

• Is the building on Fannie Mae's or Freddie Mac's approved or ineligible project lists?

• Is the HOA involved in any litigation?

• What percentage of units are owner-occupied?

• What are the HOA reserves, and are there any planned special assessments?

• Is the building FHA-approved or VA-approved, if you plan to use one of those loans?

The 2026 conforming loan limit for all Oregon counties is $832,750. Condos priced above that may also bring jumbo guidelines into the picture, which adds another layer to the project review.

My Take

I love this kind of deal, because it is the exact moment where a buyer needs a broker more than a bank. A single lender will tell you "this condo doesn't work for our loan" and send you home. My job is to ask a different question: is there a loan that works for this condo and this buyer?

The most important lesson for first-time buyers is this: check the building, not just yourself. Your credit score and down payment are only half of the approval when you buy a condo. And if you hear "the condo isn't approved," do not assume it is over. Sometimes it means the loan program has to change, not the home.

If you are looking at a condo in Portland or Vancouver and want to know whether it can be financed before you make an offer, reach out here. I am happy to review the building with you and your agent.

Frequently Asked Questions

Can you get a mortgage on a non-warrantable condo in Oregon? Yes. Conventional (Fannie Mae/Freddie Mac) and FHA loans will not work if the building fails project requirements, but some lenders offer non-warrantable condo programs. These usually require a larger down payment and may carry a higher interest rate.

How much down payment do you need for a non-warrantable condo? It depends on the lender and the reason the condo is non-warrantable. Many programs ask for 20% or more, but some will go lower for well-qualified borrowers. A recent first-time buyer client in Portland closed on a non-warrantable condo with 10% down.

Why would a condo be rejected for FHA or conventional financing? Common reasons include pending HOA litigation, low owner-occupancy, one owner holding too many units, high delinquent dues, underfunded reserves, or too much commercial space. Each loan program has its own project rules.

Can a first-time homebuyer buy a non-warrantable condo? Yes. First-time buyer status does not prevent it. The lender will look at your credit, income, and down payment, plus the condo project itself. The earlier your lender reviews the building, the fewer surprises you will have.

Mitch Tugaw is a mortgage broker (NMLS #1995083) with Mortgages With Mitch, powered by Barrett Financial LLC, an Equal Housing Lender. This article is for general information only and is not a commitment to lend. Loan programs, rates, down payment requirements, and eligibility vary by lender and borrower and are subject to change. Confirm current details with a licensed loan officer before making financial decisions.