"Warrantable" vs "non-warrantable": the condo reserve test that changed in 2026

A deal is moving, the buyer's financing looks solid, and then the loan officer calls: the building came back "non-warrantable." Nothing about the unit changed. What failed is the project review — the lender's check of the condominium itself — and the reserve budget is one part of that review.

What the label means

"Warrantable" is lender shorthand for a condo project that meets the eligibility rules for conventional mortgages — the rules Fannie Mae publishes for the loans it buys. The applicable review pathway and other project requirements matter. ReserveGap does not determine mortgage eligibility.

What changed in 2026

Fannie Mae's Lender Letter LL-2026-03 rewrote the reserve part of that review, on two dates:

When a lender uses the study pathway for applications from August 3, 2026, the budget must include the reserve study's highest recommended contribution — "baseline" funding, where reserves are allowed to fall toward zero, is not accepted for that pathway. For applications on or after January 4, 2027, the Full Review percentage benchmark is 15% of annual budgeted assessment income (up from 10%) unless a qualifying reserve study is used.

The two numerical comparisons use figures from a reserve study and adopted budget. They are separate pathways, not cumulative requirements. Test 1 compares the budget's annual reserve contribution to the study's highest recommended contribution. Test 2 divides the reserve contribution by total budgeted assessment income and looks for 15%.

Different review standards

State reserve funding and lender project review ask different questions. A budget that follows a state funding schedule does not establish mortgage eligibility. The lender reviews the applicable pathway, the study and other project requirements; an indicative gap here does not prove that an owner cannot sell.

Check the numbers before the next deal does

Four dollar amounts and the property state support the numerical comparisons: total budgeted assessment income, the current reserve contribution, the study's highest recommended contribution, and reserve cash on hand. Check the source documents and the applicable assessment-income base before entering figures. Enter them below — the check runs in your browser and your numbers stay on this device.

What the budget collects this year ($)

$

Enter the assessment-income base from the budget. Lender-permitted exclusions are not calculated here.

What you're putting into reserves this year ($)

$

Current annual reserve contribution — the reserve line in this year's budget.

Highest amount the reserve study says to put in ($)

$

Highest recommended annual contribution — the largest funding schedule in the study. If it shows one schedule, use that.

Cash sitting in reserves today ($)

$

Reserve cash on hand — all reserve accounts, as of a stated date.

State

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Florida's rule is built in. The state-rule check on the paid report needs the study's component schedule.

Run the free check

No credit card or account required. Your numbers stay in this browser.

Read Limited Review and the transition to Full Review, then see what the numerical reserve results mean. Use the free condo reserve calculator with your own figures.