Is a condo you love in River North labeled “non-warrantable,” and you are wondering what that means for your purchase or sale? You are not alone. Chicago’s core neighborhoods include many mixed-use and conversion buildings where financing can be more complex. In this guide, you will learn what non-warrantable means, why it is common in River North, how it changes loan options and timelines, and the exact steps to move forward with confidence. Let’s dive in.
What non-warrantable means
A condominium project is non-warrantable when it does not meet the eligibility rules used by the major mortgage investors and insurers. Conventional conforming loans are often built to be sold to Fannie Mae or Freddie Mac, and those agencies, along with FHA and the VA, set project standards for things like owner-occupancy, reserves, litigation, and commercial use. If a project does not fit, many standard loan products become unavailable unless a lender offers an exception or a different program.
This does not mean a condo is unsellable. It means the buyer pool that uses conventional financing is smaller, approvals can take longer, and rates or down payments may be higher. Individual lenders can also apply their own overlays, which can be stricter than agency minimums.
Why it happens in River North
River North has a diverse mix of high-rise luxury towers, converted lofts and warehouses, and newer mixed-use developments. That variety creates several common triggers for non-warrantable status.
Low owner-occupancy
Many programs look for a minimum share of owner-occupied units. In near-downtown neighborhoods, investor ownership and rental activity can be higher, especially in larger towers or converted loft buildings. That makes the owner-occupancy test a frequent stumbling block.
Single-entity concentration
Agencies limit how many units can be owned by a single party. In River North, developers, investment groups, or a single landlord may hold multiple units in a conversion or boutique building, pushing concentration above typical limits.
Pending or recent litigation
Construction issues, insurance disputes, or governance matters can lead to association litigation. Lenders treat active or recent litigation as a risk flag, which often pauses or blocks standard agency approvals until the matter is resolved or clearly quantified.
Reserves and budgeting gaps
Agencies expect an association to maintain healthy reserves for capital repairs and to follow a sound budget. Smaller associations or buildings with deferred work can fall short, or they may rely on special assessments instead of reserves, which complicates underwriting.
Commercial space and short-term rentals
Mixed-use buildings with ground-floor retail, gallery space, or restaurants are common in River North. A higher ratio of commercial space or permissive short-term rental activity can shift a project out of standard eligibility.
Special assessments and delinquencies
High dues delinquencies or frequent special assessments signal financial stress. Underwriters review these items closely and may require more documentation or decline conventional financing if the metrics exceed program tolerance.
How financing is affected
Reduced buyer pool and pricing
Because many buyers rely on conforming loans, non-warrantable status can reduce demand. That may lengthen time on market or require price or concession strategies, especially if the building has a known trigger like litigation or low reserves.
Higher costs and tighter terms
Portfolio or specialty lenders that finance non-warrantable condos often charge higher rates and fees, and they may cap loan-to-value ratios or require larger down payments and higher reserves. The structure varies by lender and program.
Slower approvals and tighter appraisals
Expect more paperwork and manual review. Lenders typically request a full condo questionnaire, HOA financials, insurance details, and board minutes. Appraisers may note project issues or limited comparable sales, which can influence value and conditions prior to closing.
Loan options you will see
- Portfolio loans held in-house by banks or credit unions. Often the most practical route for River North buyers, with pricing and LTV tailored to the project’s risk profile.
- Jumbo loans for higher-priced units, underwritten outside agency rules, usually with higher costs than conforming.
- FHA or VA only if the project is on the respective approved list.
- Private or hard money for speed, typically used by investors due to higher cost.
- Cash, which avoids financing constraints entirely.
What this means for buyers
If you are buying in River North, focus on clarity and speed. You want to know early whether the project is financeable with your target lender and what the realistic timeline looks like.
- Get pre-approved with a lender that regularly closes non-warrantable or portfolio condo loans in central Chicago. Ask them to review the specific project, not just your income and credit.
- Build time into your contract for HOA document review and lender project approval. Portfolio reviews often add one to four weeks.
- Expect more documentation. Your lender will likely request the condo questionnaire, budget, reserve balance, insurance declarations, delinquency data, and any litigation updates.
- Align your contingencies with the project’s risk. You can negotiate inspection and financing time frames that reflect the need for added HOA verification.
- Be ready to pivot. If your first-choice lender will not accept the project, an experienced local lender may still have a workable portfolio path.
What this means for sellers
If your building is likely non-warrantable, you can still sell successfully. Preparation and positioning are the keys.
- Disclose early. Provide a complete resale packet and answer common lender questions up front to reduce surprises.
- Target the right buyers. Market to cash buyers, investors, and buyers working with portfolio-capable lenders.
- Calibrate pricing and concessions. A smaller buyer pool may require flexibility. Use local comps and a nuanced valuation strategy tailored to your building’s status.
- Coordinate with lenders. Some local banks will pre-approve the project for qualified borrowers, which can speed up future deals.
Your step-by-step checklist
Use this list before you write an offer or go live on the market.
Early actions
- Ask for the building name, total unit count, and HOA or management contact.
- Request the resale package or a condo questionnaire as early as possible.
- Engage a local lender experienced with River North condos and non-warrantable projects to confirm loan options for this building.
Documents to review
- HOA name, total units, and residential versus commercial mix.
- Current budget and most recent reserve balance; reserve study if available.
- Year-to-date financials and a delinquency report.
- Minutes from recent board meetings, ideally the last 6 to 12 months.
- Insurance declarations for the master policy and any noted gaps or exclusions.
- Declaration, bylaws, rules, and any rental or short-term rental restrictions.
- Owner-occupancy details or an investor-versus-owner breakdown if available.
- Status of any pending or recent litigation, plus summaries or pleadings.
- Management agreement and key contacts.
- Notices of code violations, planned capital projects, or special assessments.
Questions for your lender
- Will you finance units in this specific project, and which loan programs are available?
- What LTV, credit, and debt-to-income requirements apply to these programs?
- What documentation is required from the HOA, and how long will review take?
- How do rates and fees compare with conforming loans for a similar borrower profile?
- What is your track record closing loans in similar River North buildings?
Questions for the HOA or manager
- What percentage of units are owner-occupied versus rented?
- Are there current or expected special assessments?
- What is the reserve balance, and is there a reserve study?
- Is there any pending or recent litigation, and what is the potential exposure?
- What are the rental and short-term rental policies, and how are they enforced?
Buyer strategies
- Seek pre-approval tied to the specific project, not just a generic letter.
- Consider increased earnest money or temporary cash solutions if financing risk is higher.
- Negotiate contingency periods that reflect the added project-level review.
Seller strategies
- Deliver a complete, organized resale packet promptly to serious buyers.
- Discuss targeted marketing and potential concessions that match current market conditions.
- Coordinate with a local lender on project-specific pre-approvals to speed buyer qualification.
Next steps
Guidelines and lender overlays change, and two River North buildings on the same block can underwrite very differently. The surest path is to combine early document review with a lender that knows Chicago condo financing and an agent who understands how to position a non-warrantable listing. If you want a clear plan tailored to your building or a purchase you are considering, schedule a conversation with Jonathon Spradling for a detailed, next-step strategy.
FAQs
What is a non-warrantable condo in River North?
- A condo in a project that does not meet agency or insurer eligibility rules, which narrows conventional loan options and can affect rates, timelines, and marketing.
How can you tell if a building is non-warrantable?
- Ask for the condo questionnaire, budget, reserves, insurance, litigation status, and owner-occupancy data, then have a local lender evaluate the project.
Can you get a conventional loan on a non-warrantable condo?
- Often no, unless the project meets agency rules on a limited or full review; buyers typically use portfolio or jumbo options, or pay cash.
How long do these loans take to close in Chicago?
- Plan for added review time beyond standard timelines, commonly an additional one to four weeks for HOA and project underwriting.
Do non-warrantable condos sell for less in River North?
- They can require more time on market or pricing flexibility due to a smaller buyer pool, though results vary by building, condition, and overall demand.
