You found it — a condo steps from the water in Narragansett, Newport or Watch Hill. Then the lender calls: the building is “non-warrantable,” and they're out. Before you walk away from the property, understand what that label means, because on the Rhode Island coast it's incredibly common — and very financeable.
Why coastal condos get flagged
A condo is “warrantable” when its project meets Fannie Mae and Freddie Mac rules. Resort and seasonal buildings often fail one or more of them — not because of the buyer, but because of the building:
- A high share of units are rentals or investor-owned.
- The building has short-term-rental or “condotel” features.
- There's significant commercial space, or one entity owns many units.
- The HOA is in litigation, or its reserves fall short of agency thresholds.
Any of those can make a conventional lender decline — even when you're well qualified.
How we finance them
As a South County brokerage, we work with specialty lenders who underwrite non-warrantable condos every day — for primary residences, second homes and investment properties alike. If you're buying it as a rental, a DSCR loan can often qualify the unit on its rental income instead of yours.
Before you give up on the condo
Send us the building and the HOA details and we'll review the project up front — so you know whether it's financeable before you make an offer, not after. Contact us or call (401) 481-8050.
Have questions about how this affects your plans? Our team is happy to talk through your scenario — call (401) 481-8050 or get in touch.