California Condo Mortgage Guide 2026 | SB-326, Non-Warrantable & HOA Financing
Buying a condo in California is one of the most popular paths to homeownership — but financing one is more complicated than financing a single-family home. Lenders don’t just evaluate you; they evaluate the entire condo building. HOA finances, pending litigation, reserve funds, rental ratios, and California’s SB-326 balcony inspection law can all affect whether you qualify — and at what rate.
I’m Michael DiVita, a California mortgage broker with over 20 years of experience. I’ve helped hundreds of buyers finance condos across San Francisco, Los Angeles, San Diego, the East Bay, Marin County, and beyond — including projects that other lenders turned away. This guide covers everything you need to know about condo financing in California in 2026.
📞 Ready to get started? Call or text us at (800) 239-1103 — we’ll review your condo’s eligibility same-day.
What Makes Condo Financing Different in California?
When you finance a single-family home, the lender’s analysis stops at your financial profile. With a condo, there’s a second underwriting review — the condo project review. Fannie Mae, Freddie Mac, FHA, and VA all have specific rules about which condo buildings they will and won’t finance.
California adds another layer because of two major state laws: SB-326 (the Balcony Inspection Law for condos) and SB-721 (the equivalent for apartment buildings). If a condo HOA hasn’t completed its required SB-326 inspection, many lenders won’t fund loans in that building — full stop.
| Factor Lenders Evaluate | Why It Matters |
|---|---|
| HOA reserve fund level | Under 10% funded = often non-warrantable |
| Owner-occupancy ratio | Must be 50%+ for conventional (35%+ for FHA) |
| Pending HOA litigation | Active lawsuits can make a building unfinanceable |
| SB-326 inspection status | Required for most CA condo buildings by Jan 2025 |
| Single-entity ownership | If one entity owns 10%+ of units, building may be restricted |
| Commercial space percentage | Over 35% commercial = potential non-warrantable |
Types of Condo Loans in California
Conventional Condo Loans (Fannie Mae / Freddie Mac)
Most condo buyers use conventional loans. Fannie Mae’s Condo Project Review process classifies buildings into categories: Full Review, Limited Review, and CPM (Condo Project Manager) approved projects. Buildings already on Fannie Mae’s approved list can close faster. Those requiring Full Review need a condo questionnaire from the HOA, financials, insurance certificates, and board meeting minutes.
- Down payment: 3%–20% depending on loan type and occupancy
- Credit score: 620 minimum (680+ for best pricing)
- PMI required below 20% down
- Warrantable buildings only (see non-warrantable section below)
FHA Condo Loans
FHA requires the condo building to be on HUD’s FHA-approved condo list — and in California, many buildings are not approved. However, since 2019, FHA allows “single-unit approvals” for individual units in non-approved buildings, provided the building meets certain benchmarks. This is a great option for buyers with credit scores as low as 580 and only 3.5% down.
VA Condo Loans
VA loans also require condo building approval, maintained on the VA-approved condo list. The good news: the VA approval process can sometimes be initiated by the lender, and VA loans offer 0% down for eligible veterans — even on condos. If a building isn’t VA-approved, we can often work with the HOA to get it on the list.
Non-Warrantable Condo Loans
If a condo building doesn’t meet agency guidelines — due to HOA litigation, investor concentration, low reserves, or any of a dozen other factors — it’s classified as “non-warrantable.” Standard Fannie/Freddie/FHA/VA financing won’t work. But portfolio lenders and non-QM lenders will often fund these projects at slightly higher rates. Learn more about non-warrantable condo financing →
Jumbo Condo Loans
In California’s high-cost markets — San Francisco, Marin County, Los Angeles — condo prices frequently exceed conforming loan limits ($1.2M in some Bay Area counties). Jumbo condo loans are available but require stricter underwriting and often a higher down payment (10–20%). We specialize in jumbo condo financing throughout California.
SB-326: California’s Balcony Inspection Law & Condo Financing
Senate Bill 326 (effective January 1, 2025) requires all California HOAs governing condos with three or more floors to inspect all exterior elevated elements — balconies, decks, walkways, and stairways. Buildings that haven’t completed this inspection are increasingly being flagged by lenders, and some are refusing to fund loans in non-compliant buildings entirely.
This law has created a significant wave of non-warrantable designations across California — particularly in older buildings in SF, LA, and San Diego. We’ve helped many buyers navigate financing in SB-326 impacted buildings by identifying lenders who still fund them and structuring loans accordingly.
👉 Complete SB-326 Condo Mortgage Guide →
👉 Find SB-326 Approved Lenders in California →
Non-Warrantable Condos: When Standard Financing Won’t Work
A non-warrantable condo is one that doesn’t meet Fannie Mae or Freddie Mac eligibility standards. In California, this is more common than most buyers expect. Common reasons a condo building is non-warrantable:
- HOA is involved in active litigation (even if it seems minor)
- More than 35% of units are investor-owned or rented
- One entity (developer, investor) owns more than 10% of units
- Reserve fund is below 10% funded
- Building has more than 35% commercial space
- The project is a condotel or hotel-condo hybrid
- SB-326 inspection has not been completed
Non-warrantable doesn’t mean unfinanceable — it means you need the right lender. We work with portfolio lenders and non-QM lenders who specialize in exactly these situations.
👉 Non-Warrantable Condo Loans in California: Full Guide →
HOA Issues That Affect Condo Financing
The HOA is the gatekeeper to condo financing. Even if you personally have perfect credit and a large down payment, a problematic HOA can kill the loan. Key HOA red flags lenders look for:
- Pending special assessments: Large upcoming assessments (roof replacement, elevator, etc.) can trigger additional lender scrutiny
- Delinquent dues: If more than 15% of unit owners are delinquent on HOA fees, the building may not qualify for agency financing
- Inadequate insurance: The HOA’s master insurance policy must meet coverage requirements
- HOA litigation: Any active lawsuit — even a small slip-and-fall — can make the building non-warrantable
- Low reserve funds: Fannie Mae wants to see at least 10% of annual budget in reserves
We always pull the condo questionnaire early in the process so we know exactly what we’re dealing with before you’re deep into escrow.
Condo Financing by California City
Condo financing challenges vary significantly by market. Here’s what we see most often in California’s major condo markets:
San Francisco Condos
SF has some of the most complex condo dynamics in the state. TIC (Tenancy-in-Common) buildings, which are technically not condos, require specialized fractional financing. Many older Edwardian and Victorian-era buildings are non-warrantable. SB-326 has created additional complications in buildings from the 1970s–1990s with wood-frame balconies. We close condo loans in SF every week and know which buildings have lender issues before you do.
Los Angeles Condos
LA’s condo market ranges from newly built luxury high-rises in Downtown and Century City to 1970s walk-ups in the Valley. New construction condos require a different type of review (new project approval), while established buildings often face SB-326 or litigation issues. We serve all LA neighborhoods including DTLA, Santa Monica, Brentwood, Silver Lake, and the San Fernando Valley.
San Diego Condos
San Diego’s condo market includes a large number of VA buyers — and VA financing has strict approval requirements. We can often facilitate VA condo project approval for buildings not currently on the list, making homeownership accessible for veterans. We serve Mission Valley, Little Italy, Pacific Beach, La Jolla, and all San Diego submarkets.
Orange County Condos
Irvine, Newport Beach, Anaheim, and Huntington Beach all have active condo markets. Irvine’s master-planned communities often have newer buildings with good HOA financials, while coastal OC properties may face jumbo loan requirements.
Bay Area / Marin County Condos
Marin’s condo market is smaller but high-value. Sausalito’s hillside and waterfront condos are a specialty — these often have unique financing considerations due to building age, hillside construction, and SB-326 exposure. We’ve built deep expertise here. Learn about our Marin County mortgage services →
The Condo Loan Process: What to Expect
Here’s how we approach every condo purchase financing:
- Pre-approval first — We review your income, credit, and assets to determine what you can borrow before you start shopping
- Condo eligibility check — As soon as you identify a building, we run it through Fannie Mae’s CPM database and our lender network to flag any issues
- HOA questionnaire ordered early — We request the condo questionnaire immediately to catch HOA issues before they delay closing
- Lender matching — Based on the building’s profile, we match you with the right lender (conventional, FHA, VA, non-QM, or portfolio)
- Fast close — Most of our condo purchases close in 21–30 days
Frequently Asked Questions: Condo Mortgages in California
What is the minimum down payment for a condo in California?
For a warrantable condo, conventional loans start at 3% down (for first-time buyers) or 5% down. FHA requires 3.5% down with a 580+ credit score. VA loans offer 0% down for eligible veterans. Non-warrantable condos typically require 10–20% down through portfolio or non-QM lenders.
How do I know if a condo building is warrantable?
A warrantable condo meets Fannie Mae and Freddie Mac eligibility guidelines. Key requirements include: at least 50% owner-occupied units, no active HOA litigation, reserve fund above 10% of annual budget, no single entity owning more than 10% of units, and SB-326 inspection completed (for California). The fastest way to check is to have your mortgage broker run the building — we do this for free as part of our pre-approval process.
Can I get an FHA loan on a condo that’s not FHA-approved?
Yes, since 2019 FHA allows “single-unit approvals” for individual condos in non-approved buildings, as long as the building meets certain criteria. The building must be primarily residential, have at least 50% owner-occupied units, and meet other FHA project standards. Not every building qualifies, but this opens up FHA financing to many more California condos than before.
What is SB-326 and how does it affect condo financing?
SB-326 is a California law (effective January 1, 2025) requiring HOAs of condo buildings with 3+ floors to inspect all exterior elevated elements — balconies, decks, walkways, and stairs. Lenders are increasingly requiring proof of SB-326 compliance before funding loans. Buildings that haven’t completed inspections may be considered non-warrantable, requiring alternative financing options. Call us to check your specific building’s status.
Can I finance a non-warrantable condo in California?
Yes. Non-warrantable condos can be financed through portfolio lenders and non-QM (non-qualified mortgage) lenders who keep loans on their own books rather than selling them to Fannie Mae or Freddie Mac. Rates are typically 0.5%–1% higher than conventional loans, and down payment requirements are usually 10–20%. We work with multiple non-warrantable condo lenders and can often find competitive options even for challenging buildings.
Does HOA litigation always make a condo unfinanceable?
Not always. Minor litigation that’s been resolved, or HOA-vs-HOA disputes that don’t involve the physical condition of the building, may still be acceptable to some lenders. However, any active litigation involving construction defects, personal injury, or significant property damage will typically make the building non-warrantable for conventional financing. Portfolio and non-QM lenders review these case-by-case. We’ve successfully financed condos in buildings with active litigation by matching the right lender to the specific situation.
How long does it take to close on a condo in California?
Condo purchases typically take 21–35 days to close — slightly longer than single-family homes due to the condo project review process. The main variable is HOA response time on the condo questionnaire. We order the questionnaire on day one to minimize delays. If a building is already Fannie Mae CPM-approved or on the FHA/VA approved list, closings can happen in 21 days or less.
Related Condo Financing Resources
- SB-326 Condo Mortgage California: Complete Guide
- SB-326 Approved Lenders in California
- Non-Warrantable Condo Loans California
- SB-721: How California’s Apartment Inspection Law Affects Condo Buyers
- SB-326 Condo Financing Explained [Video Guide]
- Non-Warrantable Condos: All the Reasons Fannie Mae Says No
- Sausalito Condo & Hillside Property Financing
- Marin County Mortgage Broker
- San Francisco Mortgage Broker
- Jumbo Loans California
Meet Your California Condo Mortgage Specialist
Condo financing in California requires a broker who knows which buildings have lender issues, which lenders are flexible on HOA problems, and how to structure a deal when standard financing won’t work. That’s exactly the kind of experience I bring to every condo transaction.
With over 20 years in California mortgage lending, I’ve financed condos in some of the most complex buildings in the state — SB-326 impacted, non-warrantable, jumbo, FHA single-unit approvals, and VA project approvals. I work directly with buyers, real estate agents, and HOA boards to make deals happen.
👉 Learn more about Michael DiVita and the DiVita Home Finance team →
📞 Call or text us today: (800) 239-1103
📧 michael@divitahome.com
We respond same-day. We’ll run your condo’s eligibility for free, tell you exactly what loan options are available, and give you a clear path to closing.
About DiVita Home Finance
DiVita Home Finance is a small, family-owned mortgage company based in Marin County, California. When you call, you speak directly with Michael DiVita — the owner — not a call center, not an out-of-state rep, not someone reading from a script. We’re here for a low-key, no-obligation conversation about your situation.
We take your privacy seriously. We will never sell your information to third-party lenders or lead generation companies — unlike many of the large mortgage platforms. Your inquiry stays with us, period.
📞 Call: (800) 239-1103 | 💬 Text Michael directly: (310) 849-9124
