Found a condo you love in Eureka Valley, then heard it is “non‑warrantable”? You are not alone. San Francisco has many buildings that do not fit standard lending rules, which can make financing feel confusing and slow. In this guide, you will learn what non‑warrantable really means, which loan options still work in our market, what lenders will ask for, and how to move forward with a clean, realistic plan. Let’s dive in.
Non‑warrantable condos explained
A non‑warrantable condo is a unit in a building that does not meet Fannie Mae or Freddie Mac project eligibility rules. It can also mean a building is not approved for FHA or VA loans. When a project is non‑warrantable, most conforming loans are off the table.
That matters in Eureka Valley because many buildings are small conversions or older wood‑frame properties with unique HOA histories. Some have recent condo maps from a former TIC, uneven owner occupancy, or complex insurance. These details can push a project outside agency rules and limit your loan choices.
If a building is non‑warrantable, you can still finance it. You just need the right lender type, the right documents, and a plan for timing and costs.
Why Eureka Valley condos become non‑warrantable
Several common issues trigger non‑warrantable status in San Francisco. Watch for:
- Ownership concentration by one investor or entity holding a high share of units.
- Low owner‑occupancy across the building.
- Weak HOA budgets or limited reserves.
- Active or recent HOA litigation.
- Significant commercial or mixed‑use elements and short‑term rental activity.
- Unusual or split ownership structures from condo or TIC conversions.
- Insurance coverage gaps, especially around earthquake exposure.
- Incomplete HOA governance documents or recent conversions with limited sales history.
These factors reduce the number of buyers who can use traditional loans, which can affect pricing and days on market.
Financing options that work in SF
When a building does not fit agency rules, you can still buy with alternative programs. Here are the main paths and what to expect.
Portfolio loans
Portfolio lenders keep loans on their own books, which allows more flexibility. Expect larger down payments, a rate premium compared to conforming loans, and tighter loan‑to‑value or debt‑to‑income limits. The upside is stability, full documentation options, and local underwriters who understand San Francisco condo risk.
Bank statement and asset‑based programs
If you are self‑employed or your income is complex, alt‑doc programs can help. Lenders may underwrite using bank statements or strong liquid assets. Plan for higher down payments, more reserves, and higher rates than standard conforming loans.
Bridge loans
Short‑term bridge financing can help you close quickly while the HOA resolves a trigger issue, like wrapping up litigation or boosting reserves. You need a clear exit plan to refinance or sell once the building improves its eligibility.
HELOCs and seller financing
Some buyers use a HELOC on another property to create a larger cash down payment. Seller financing is also possible, with the seller carrying a note for all or part of the price. These options can close gaps when lenders hesitate, but terms vary and you should assess liquidity and timing before committing.
Private lenders and hard money
Private financing is collateral‑driven with higher rates and shorter terms. It can be a fit for investors or unique timing needs. For owner‑occupants, it is usually a tactical bridge, not a long‑term solution.
FHA and VA paths
FHA and VA loans generally require the condo project to be approved. In limited cases, an FHA single‑unit approval may be possible, but it requires extra review and can take more time. Most buyers in non‑warrantable buildings choose a portfolio or similar program instead.
Unit‑only underwriting
A small number of lenders may underwrite only the unit with conservative overlays. These programs are limited and often come with tighter terms. If available, they can be a useful back‑up.
Costs and tradeoffs to expect
Financing non‑warrantable condos often comes with added cost. Plan for:
- Larger down payment, often 15 to 30 percent or more.
- Higher interest rate than conforming loans, sometimes by several tenths of a point or more.
- Higher lender fees and more detailed third‑party reviews.
- Extra reserves, such as 6 to 12 months of payments and HOA dues.
The exact numbers depend on the lender, your profile, and the building. It pays to compare quotes from lenders who do this work regularly.
What lenders will ask for
Expect a deeper document set for both you and the HOA. Getting this early reduces surprises.
- HOA governance: CC&Rs, bylaws, articles, and recorded condo documents.
- Financials: current budget, reserve study if available, reserve account statements, and assessment history.
- Occupancy and ownership: owner‑occupancy, rental percentages, and any single‑entity ownership details.
- Insurance: master policy with limits and endorsements, plus any earthquake or flood exclusions. Individual unit policy if required.
- Litigation: written disclosures and the last 12 to 24 months of HOA meeting minutes.
- Estoppel certificate: confirmation of dues, assessments, and balances for the subject unit.
- Title and permits: preliminary title report, any easements, and proof of legal conversion or occupancy for conversions or former TICs.
- Borrower file: full application, income or asset documentation, evidence of reserves, and strong credit.
This extra review can add 2 to 4 or more weeks to underwriting, often driven by how fast the HOA provides documents.
Local checks in San Francisco
A bit of local homework can save you weeks later.
- Confirm permits and any conversion paperwork with the city’s building and planning records.
- Review short‑term rental registration rules if the building has rentals, since non‑compliant activity can affect eligibility.
- Understand rent control and tenant protections for any rented units, which can affect investor plans.
- Evaluate earthquake retrofit status and insurance scope, since earthquake exposure and special assessments can impact both HOA finances and lender views.
- Verify unit ownership counts through public records if you suspect one investor owns multiple units.
Buyer action plan
Use this checklist to stay ahead of the process.
- Get pre‑underwritten by a lender that regularly funds non‑warrantable condos.
- Ask for the full HOA packet as soon as you are serious about a unit.
- Budget for a larger down payment and reserves so you can move fast.
- Build a back‑up path, such as a bridge loan or HELOC, in case the first lender needs more time.
- If your goal is to refinance into a conforming loan later, plan the steps that would improve the building’s eligibility, such as resolving litigation or boosting reserves.
Seller action plan
Position your listing to remove friction and expand your buyer pool.
- Order a complete HOA packet before going live and keep it updated.
- Work with the HOA to clarify reserves, delinquency status, and insurance coverage.
- Disclose any litigation and provide minutes to reduce buyer and lender uncertainty.
- Consider concessions, such as a rate buydown credit or limited seller financing, to widen financing options.
- Price with the reduced conforming buyer pool in mind.
How we navigate financing in Eureka Valley
You deserve a clear path from offer to close, even when a building is non‑warrantable. Here is how we approach it.
- Early HOA audit: We review budgets, reserves, insurance, litigation, and occupancy to identify lender triggers upfront.
- Lender match: We connect you with portfolio and specialty programs that regularly fund San Francisco non‑warrantable condos.
- Documentation sprint: We assemble a lender‑ready package, including minutes, insurance, and estoppels, to cut cycle time.
- Risk sequencing: We set the right contingencies and timeline based on HOA responsiveness and lender due diligence.
- Backup plan: We prepare secondary options, such as bridge financing or unit‑only underwriting, to keep you on track.
- Exit strategy: If you want to refinance into a conforming loan later, we map the building steps that can improve eligibility.
Ready for a straight, lender‑aware plan for your Eureka Valley condo? Schedule a free consultation with James Kil.
FAQs
What does non‑warrantable mean for Eureka Valley buyers?
- It means the building does not meet agency project rules, so you will likely use a portfolio, alt‑doc, or private program with different down payment and rate terms.
Can I use FHA or VA for a non‑warrantable San Francisco condo?
- Usually not unless the project is approved or you qualify for a limited single‑unit approval, which is less common and can take more time.
How long does financing a non‑warrantable condo take in SF?
- Expect standard timelines plus an extra 2 to 4 or more weeks for HOA and lender due diligence, depending on document speed and complexity.
How much down do I need for a non‑warrantable condo?
- Many programs expect 15 to 30 percent down, with possible reserve requirements of 6 to 12 months of payments and HOA dues.
What if the HOA will not provide documents in California?
- Associations are required to provide certain records for a fee, so work through the seller and your agent, and consult a real estate attorney if access is delayed.
Can a non‑warrantable Eureka Valley condo become warrantable later?
- Yes, if the HOA raises reserves, resolves litigation, improves owner occupancy, or reduces single‑entity ownership, but it can take months to years.
Is seller financing common for non‑warrantable condos in SF?
- It is an option in tight inventory markets and can help bridge lender limits, but terms vary and should fit your exit plan.
