Condo Mortgages Made Simple: What You Need To Know

Last week, we explored why condos are a smart move for budget-conscious buyers, investors, and anyone looking for low-maintenance living. Now that you know the why, let’s talk about the how—specifically, how financing a condo works.

Getting a mortgage for a condo isn’t quite the same as buying a single-family home, but with the right guidance, it’s nothing to stress over. Here’s what you should know before you apply.

🧩 What Makes Condo Mortgages Different?
Condos can be a great choice for affordability and ease of ownership—but financing one comes with a few more layers. One of the biggest factors lenders consider is whether the condo is warrantable or non-warrantable.

Warrantable condos meet the criteria set by Fannie Mae and Freddie Mac (which are the entities that financially back a majority of home loans in the US,) making them easier to finance, often with lower interest rates and flexible down payment options.

Non-warrantable condos don’t meet those standards, which can mean higher interest rates, larger down payments, and tighter loan requirements.

Knowing the difference can save you time (and money) during your loan process.

🏘 Warrantable vs. Non-Warrantable Condos
Warrantable Condos typically have:
✅ More than 50% owner-occupied units
✅ A financially stable HOA (at least 10% of the budget in reserves)
✅ No ongoing legal issues involving the condo association
✅ No commercial space or short-term rentals
✅ Full completion (no active construction)
✅ No single entity owning a large number of units

Non-Warrantable Condos may include:
⚠️ A high percentage of rentals or short-term use (like Airbnbs or timeshares)
⚠️ Financially troubled HOAs or legal disputes
⚠️ Ongoing construction or commercial use (25% or more of the property)
⚠️ One investor or entity owning multiple units

If you’re unsure where your dream condo falls, don’t worry—our team can help you figure it out.

💵 Understanding Condo Mortgage Payments (PITIA)
When you take out a mortgage, your monthly payment isn’t just the loan itself. It’s a combo of several components known as PITIA:

Principal – The loan amount

Interest – What the lender charges to lend you the money

Taxes – Local property taxes

Insurance – Homeowner’s insurance coverage

Association Dues – Monthly HOA fees for upkeep, maintenance, and amenities

With condos, the “A” is an important piece of your monthly budget, so make sure it’s factored into your financial planning.

🏦 Financing Options for Every Condo
While warrantable condos are the easiest to finance, non-warrantable options are absolutely still possible. At Southern Trust Mortgage, we offer loan programs for both types—whether you’re buying your first home, a second home, or an investment property.

And yes, that includes purchases and refinances.

Financing a condo might seem a little more detailed, but it doesn’t have to be difficult. Our condo specialists—including Cheryl Young, who you met last week—are here to make the process simple, quick, and tailored to your needs.

Have questions? Ready to run the numbers?Contact the Pat Miller Team at STM to get started! 
Pat Miller
Loan Officer | NMLS# 698968
PatMillerTeam@southerntrust.com | 757-390-6314