Buying a condo near ASU and hearing “non‑warrantable” from a lender can feel like a door closing. It is not. It simply means you need the right financing strategy and a team that knows this micro‑market. In this guide, you will learn what makes a Tempe condo non‑warrantable, which loans still work, how to prep your documents, and how to structure an offer that closes smoothly. Let’s dive in.
What non‑warrantable means
A condo is “warrantable” when it meets agency rules so conventional lenders can sell the loan to Fannie Mae or Freddie Mac. If a project does not meet those project standards, it becomes “non‑warrantable.” In that case, most conventional lenders will not finance units in that project through standard programs. You can still buy; you will use portfolio, investor, or other alternative loan products.
Project issues, not your personal credit, drive warrantability. Common review factors include owner‑occupancy levels, any single owner holding a large share of units, commercial space ratios, pending litigation, reserve funding, and HOA insurance and financials. Some programs allow limited or single‑unit approvals, but those are exceptions that need extra review.
Why ASU‑area condos go non‑warrantable
Condos around ASU serve a strong rental market, which can lower owner‑occupancy below many lender overlays. Many lenders use 50 to 60 percent owner‑occupancy as a guideline, but the exact threshold varies. Projects with lots of student or short‑term rentals can also face insurance and governance concerns in underwriting.
Investors sometimes own large blocks of units, which raises concentration flags. Older conversions near campus may have construction defects or active litigation. Some associations have tight budgets, high delinquency rates, or rely on special assessments, which can affect eligibility. Mixed‑use buildings with significant retail or restaurant space can also miss commercial ratio limits some lenders require.
Financing options that work
There are proven paths to finance non‑warrantable condos in Tempe. Your best fit depends on whether you will occupy the unit, your down payment, and how fast you need to close.
Conventional agency (if project is eligible)
- Use this if the project meets Fannie Mae or Freddie Mac standards or gets approved.
- Pros: Competitive rates and predictable underwriting.
- Cons: Not available if the project is non‑warrantable. Confirm status early.
FHA or VA for owner‑occupants
- FHA and VA can work if the project is approved or qualifies for a single‑unit review in some cases.
- Pros: FHA offers low down payment options for eligible buyers; VA supports eligible veterans.
- Cons: Approvals require extra project review time, and not all projects qualify. Projects with litigation or certain flags may not be eligible.
Portfolio loans (local banks and credit unions)
- Best for: Buyers who want a long‑term loan but are in a non‑warrantable project.
- How it works: The lender keeps the loan instead of selling it, which allows more flexible project rules.
- Pros: Local lenders often know ASU‑area projects and can move quickly.
- Cons: Rates and fees are usually higher than agency loans. Down payments often start around 10 to 25 percent for owner‑occupants and 20 to 30 percent or more for investors. Reserve requirements can be higher.
DSCR investor loans
- Best for: Investors who prefer underwriting based on rental income rather than personal income.
- How it works: The lender measures the property’s rent against the mortgage payment to calculate a debt‑service coverage ratio.
- Pros: Flexible for self‑employed buyers and portfolio investors, often with faster approvals.
- Cons: Higher rates and larger down payments than agency loans. Many programs expect 20 to 30 percent down. Some lenders exclude projects with certain community risks.
Private or bridge financing
- Best for: Very fast closings or buyers who will refinance later.
- Pros: Speed and flexibility on project issues and credit.
- Cons: Higher rates and fees, shorter terms, and possible prepayment penalties. This is usually a short‑term solution.
Seller or creative financing
- In some cases, sellers may carry a portion or offer creative terms to bridge to permanent financing.
- This is situational and requires legal and financial review.
Pre‑approval and HOA document checklist
Getting your lender what they need early will save weeks. Here is what to prepare.
Your personal loan documents
- Government ID and Social Security number
- Last 2 years of tax returns and W‑2s, or profit and loss statements if self‑employed
- Recent 2 to 3 months of bank statements for assets and reserves
- Current pay stubs or income verification if required
- Credit authorization and explanations for any issues
- Proof of liquid reserves; expect 2 to 12 months of reserves depending on program and use
- Signed application and intent to occupy if applicable
Property and HOA documents lenders request
- Completed condo questionnaire or project form from the HOA or management
- Association financial statements and the current year budget
- HOA dues ledger showing percentage of units that are delinquent
- CC&Rs, bylaws, and articles of incorporation
- Master insurance policy declarations with coverage limits
- Most recent reserve study and proof of reserve funding
- Most recent 12 to 24 months of HOA meeting minutes
- Details on any pending litigation or claims
- Rental policy and any short‑term rental information
- Certificate of occupancy or construction completion evidence for conversions
- Unit‑level items such as current lease or estoppel if tenant‑occupied
Quick HOA asks that speed approvals
- Current owner‑occupancy percentage
- Count of units owned by any single entity
- Reserves balance, current budget, and delinquency percentage
- Any pending special assessments or litigation
- Short‑term rental rules and any proposed changes
- Management contact for the lender questionnaire
Offer strategies that win in Tempe
Non‑warrantable does not have to mean slow or risky. Use these tactics to keep your deal on track.
- Get a firm pre‑approval with a lender experienced in portfolio or DSCR loans. Ask for a product‑specific letter, not just a pre‑qualification.
- Include HOA documents with your offer. A complete condo questionnaire, financials, and minutes help underwriting begin immediately.
- Consider a larger earnest deposit or a shorter mortgage contingency period if your risk tolerance allows. Pair this with strong lender communication.
- Use a local portfolio lender or credit union when possible. Familiarity with ASU‑area associations can remove friction.
- Order appraisal and inspections right after mutual acceptance. For investors, give your lender market rent data or signed leases to support DSCR.
- Negotiate seller credits for HOA issues. If reserves are low or a special assessment is pending, request contributions or closing credits to offset risk.
- Sequence contingencies so HOA review and loan underwriting run in parallel. This shortens the overall timeline.
- If available, lock your rate after pre‑approval while the condo review is underway. Confirm lock policies to avoid expiration.
Typical timelines you can expect
Actual timing depends on HOA responsiveness and your lender’s condo process. Here are common ranges:
- Conventional loan in a warrantable project: 30 to 45 days.
- Portfolio loan in a non‑warrantable project: 14 to 45 days.
- DSCR investor loan: 7 to 21 days with a dialed‑in lender and complete HOA docs.
- FHA or VA with single‑unit review: add 2 to 6 weeks for project approval steps.
Local considerations in Tempe and Maricopa County
Short‑term rental rules and permitting can affect a project’s rental profile, which matters to lenders. Check current City of Tempe regulations and your HOA’s policy before you buy based on Airbnb income. Arizona’s condominium statutes also guide HOA disclosures and resale documents, which means you should receive key association information during your review period.
The ASU market draws steady demand from students and faculty, which supports rental income for investors. It also raises investor concentrations and can pull owner‑occupancy down. Expect lenders to scrutinize ownership concentration, reserves, and any active litigation in projects close to campus.
How The Ackerman Team helps you close
You get a full‑service team that understands Tempe’s condo market and investor lending. We connect you with lenders who finance non‑warrantable projects, including portfolio banks, credit unions, and DSCR programs. Our transaction managers assemble HOA packages early, keep the condo questionnaire moving, and coordinate appraisal and inspections to compress timelines.
We guide your offer strategy to reduce underwriting friction and negotiate credits when HOA issues surface. With Compass tools and private networks, we also source opportunities that fit your plan, whether you are buying to live near campus or building a rental portfolio.
If you want a straight path from offer to clear to close, we are ready to lead every step.
Ready to finance a non‑warrantable condo near ASU with confidence? Connect with The Ackerman Team for a plan, lender options, and a smooth closing.
FAQs
What makes a Tempe condo non‑warrantable?
- Lenders flag project issues such as low owner‑occupancy, high single‑entity ownership, pending litigation, inadequate reserves, HOA delinquencies, or high commercial space ratios.
Can I use FHA or VA for a non‑warrantable condo near ASU?
- Possibly, if the project is approved or qualifies for a single‑unit review; some projects will not qualify, and the process adds time for project review.
How much down payment do I need for portfolio or DSCR loans?
- Many portfolio programs expect 10 to 25 percent down for owner‑occupants and 20 to 30 percent or more for investors; DSCR loans commonly require 20 to 30 percent down.
How fast can I close on a non‑warrantable condo?
- With a responsive HOA and an experienced lender, DSCR loans can close in 7 to 21 days and portfolio loans in 14 to 45 days; timing hinges on condo review speed.
What HOA documents should I collect before I write an offer?
- Ask for the condo questionnaire, financials and budget, insurance declarations, reserve study, meeting minutes, delinquency report, rental policy, and any litigation details.
Do short‑term rentals affect financing near ASU?
- Yes, short‑term rental activity and policies can affect lender risk views and project eligibility, so confirm City of Tempe rules and HOA policies before you buy.
