Most lenders treat a non-warrantable condo like a closed door. The file gets flagged, the deal gets declined, and the buyer is left without options. That is the point where A and N Mortgage starts working the file.
Non-warrantable condo financing in Chicago has become one of the tougher stress tests a buyer or agent can face. Fannie Mae and Freddie Mac tightened their condo requirements in August 2023. That change has meant more buildings getting flagged and more deals stalling at underwriting. More buyers are hearing no from lenders who simply move on to the next file.
A non-warrantable flag does not mean a deal is dead. Fannie Mae and Freddie Mac now require full project review on most condo transactions. Buildings with reserve shortfalls, pending litigation, or structural flags get declined by lenders who lack the tools or relationships to work through it. A lender who can read association documents and work directly with condo boards changes the outcome. That lender can often find a path to warrantability or a viable non-agency alternative.
Full condo review means a lender must examine a building's financials, pending litigation, structural disclosures, reserve funding levels, and budget allocations before approving a loan. Before August 2023, many transactions moved through on a limited review, a much shorter process that did not require all of that documentation. Fannie Mae then updated its condo project eligibility requirements, and the standard shifted across the board.
Chicago buildings that had sailed through limited review suddenly faced scrutiny they were not prepared for. Reserve shortfalls that had been quietly deferred became disqualifying flags. Pending litigation that associations had not fully disclosed became deal-stoppers.
The scrutiny itself is not the problem; it is actually the whole point. A building that carries deferred maintenance or underfunded reserves does not see those costs disappear at closing. They surface later as special assessments, sometimes years down the road and often without warning. Full review forces that disclosure upfront, where a buyer can actually see it. Buyers who understand what the process protects them from tend to appreciate it.
The real challenge is walking a client through that reality mid-transaction. They are already under contract, already anxious, and already watching the calendar. That conversation is where an experienced condo lender earns their place.
Dean Vlamis leads A and N Mortgage as its chief operations officer. He has spent more than two decades closing complex transactions that other lenders decline. His perspective on full condo review is grounded in what happens to buyers after the deal closes, not just at approval.
"This protects the buyer. If there is litigation, it is a cost that is going to come to the homeowners in the form of an assessment. If it is structural damage, it is another special assessment to fix that. So everything ultimately is full disclosure, which is what they want, so they know they are covered."
— Dean Vlamis, COO, A and N Mortgage
At A and N Mortgage, the condo team runs proactive checks on buildings early in the process, often before a formal application is submitted. If there are flags, they surface in time to actually address them. That beats discovering them mid-underwriting, when options are limited and the clock is running.
This matters because the Uniform Residential Appraisal Report (URAR) and the associated condo project questionnaire are only part of what a full review triggers. Budget analysis, reserve study review, and litigation disclosure all become part of the file. Buyers deserve to have a lender who reads all of it.
Non-warrantable is not a single condition, and that surprises many buyers. It actually covers a wide range of very different situations. A building might have high investor concentration, commercial or hotel-use components, or pending lawsuits against the association. Others fall short of the reserve funding threshold required by the Fannie Mae Selling Guide. Each of those situations presents a different set of options.
Where A and N Mortgage separates itself is what happens after the flag appears. Rather than declining and moving on, the team works directly with condo associations. The goal is to understand the actual issue and whether anything can be restructured to bring the building into compliance.
"We worked with them, off the record, when I used to work at big companies, they didn't have time to work it, it was just denied. We're able to actually walk and talk with the association: 'This is how you want to present your budget. This is how you want to do this to make this work.'"
— Dean Vlamis, COO, A and N Mortgage
That hands-on process is not something a call center can replicate. It means sitting with a board, reviewing their balance sheet, and showing them how to allocate reserves to meet agency thresholds. It requires institutional knowledge of what Fannie Mae and Freddie Mac want to see. It also takes direct relationships with decision-makers and a willingness to do the work even when declining would be faster.
Agents unsure whether a building can qualify can talk to Dean and the A and N Mortgage condo team early. Catching the issue before underwriting leaves far more room to solve it.
Large retail banks and national lenders operate on volume and decision matrices. A file either fits the model or it does not fit at all. There is rarely anyone available to sit with a condo board and review a budget line by line. Showing a board how to restructure reserve allocations to satisfy agency requirements takes time most lenders will not spend. The economics do not support that kind of work, and the structure does not allow it.
A mid-size and relationship-driven operation approaches the very same file quite differently. Take a Lincoln Park buyer trying to pull equity from a unit in a building with a known reserve shortfall. In that case, the first move is not a decline; it is research. The team pulls association documents and prior project review records, then talks directly with the board. That conversation determines whether a path to warrantability exists or whether a non-agency portfolio loan still closes the deal.
This connects to a broader pattern in Chicago's condo market. Buildings that have been deferring maintenance, postponing reserve studies, or carrying undisclosed litigation are hitting a wall now that full review requirements are applied consistently. For buyers and agents navigating those situations, the guidance from A and N Mortgage is consistent: surface the issue early. The longer the issue waits, the fewer options tend to remain.
None of this pressure is unique to a single Chicago building. The way reserve shortfalls and overall HOA health shape Chicago condo financing is worth understanding well before the deal reaches underwriting.
A condo is non-warrantable when the building does not meet eligibility requirements set by Fannie Mae or Freddie Mac. Common triggers include pending litigation against the association, reserve funding below required minimums, and single-entity ownership concentration. Investor-owned unit thresholds and mixed-use buildings with significant commercial or hotel components can also flag a building. Non-warrantable status limits conventional loan eligibility but does not eliminate all financing options.
Agency guidelines require condo associations to hold a minimum share of their annual budget in reserves, typically 10%, to cover future capital expenses. A building that falls below that threshold gets flagged because unit owners may face large special assessments for repairs the association cannot otherwise fund. A reserve shortfall is one of the most common reasons Chicago condo deals fail during full review. Understanding how that shortfall plays out at closing can save a buyer from an expensive surprise.
Yes, non-warrantable condos can still be financed in many cases. They often go through non-agency or portfolio loan programsthat carry their own underwriting standards. Some buildings that fail agency review can also be brought into compliance with the right guidance on restructuring association documentation. The path forward depends on the specific issue and whether the association is willing to engage. A declined file is not automatically a dead file when the lender knows where to look.
A special assessment is an additional charge levied by a condo association to cover costs not funded by regular monthly dues or existing reserves. These arise from deferred maintenance, structural repairs, roof replacements, plumbing failures, or legal judgments. Buyers who purchase a unit in a building with unresolved financial or structural issues may face these charges months or years after closing. Full review is designed to surface those risks before the deal closes rather than after.
This check should happen before submitting a formal loan application. Buildings with pending litigation, reserve shortfalls, or investor concentration issues can be identified through association documents and prior project review records. The earlier those flags surface, the more options remain, whether that means addressing the issue with the association, exploring alternative financing, or renegotiating terms. Waiting for underwriting to find the problem costs time and often the deal itself.
Associations often have more room to maneuver than they realize. Reserve budget line items can sometimes be reallocated to meet agency thresholds. Pending litigation can be disclosed in a format that satisfies agency requirements rather than triggering an automatic decline. In some cases, a lender who has worked directly with boards can show the association exactly how to present its financials to qualify. This kind of hands-on collaboration is what separates lenders who close these deals from lenders who decline them.
Generally, yes, though the gap is not always as large as expected. Non-agency and portfolio programs that finance non-warrantable condos carry higher rates and sometimes require larger down payments than conforming loans. The premium reflects the extra risk the lender assumes by holding the loan outside agency guidelines. The exact difference depends on the borrower's profile, the loan amount, and the specific program. Comparing the full loan structure, not just the rate, is what tells you the real cost.
Some lenders maintain records of buildings they have previously reviewed or financed, including eligibility findings and any issues identified at the time. A file on a building with a prior approval on record lets the condo team reference that history instead of starting over. A building with a known issue that has since been resolved is exactly where that record matters. This kind of institutional memory is a practical advantage of working with a lender who has done this work in Chicago for years. It beats processing files through a national pipeline with no local memory.
Reserve requirements across the agencies are widely expected to tighten even further. Buildings that have been deferring maintenance and postponing reserve studies are running out of runway. More buildings will get flagged, and more buyers will hear no from lenders without the relationships or appetite to work through it.
The lenders who serve Chicago buyers well in this environment are not the fastest to issue a pre-approval. They are the ones with condo expertise, direct board relationships, and the willingness to sit with an association and map a path forward. At A and N Mortgage, that has been standard practice for years, long before the August 2023 guidelines made it a routine conversation.
Has a condo deal already hit a wall at another lender? Bring the building to Dean and the A and N Mortgage condo team, who work directly with associations to find a path forward. Reach out to Dean to catch these issues before they turn into emergencies.
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