Michelle T., a 41-year-old e-commerce business owner in Fort Lauderdale, had built a successful online retail company over eight years while establishing financial stability through entrepreneurship. She earned approximately $175,000 annually through her business (documented on Schedule C tax returns), owned her primary residence—a two-bedroom luxury condo in Fort Lauderdale’s Las Olas River House (purchased six years earlier for $425,000, now valued at $615,000)—and maintained excellent credit through responsible financial management. As a business owner and homeowner (Step 3 in her financial journey), Michelle identified an exceptional opportunity to expand her e-commerce business by acquiring complementary inventory, upgrading technology infrastructure, and hiring additional staff—requiring approximately $145,000 in capital investment.

Michelle’s River House condo had appreciated $190,000 since purchase while she’d paid down her mortgage from $340,000 to $295,000, building substantial equity (current value $615,000 minus $295,000 balance = $320,000 equity available). Accessing $145,000 through cash-out refinancing would provide the capital needed for business expansion while maintaining conservative loan-to-value and preserving significant remaining equity. The expansion would generate additional revenue substantially exceeding the modest mortgage payment increase, creating positive returns that would accelerate her wealth-building trajectory.

However, when Michelle approached three traditional lenders for cash-out refinancing, all rejected her application—not because of her creditworthiness, business income, or equity position, but because her building was non-warrantable under Fannie Mae/Freddie Mac guidelines. Las Olas River House exceeded the 50% investor concentration threshold that conventional conforming lenders required for cash-out refinancing, making the property ineligible for Fannie Mae/Freddie Mac purchase regardless of actual building quality or borrower qualifications.

“I have excellent credit, strong business income, $320,000 in home equity, and a solid business expansion plan,” Michelle explained. “But three conventional lenders rejected my cash-out refinance because my building has 58% investor concentration—exceeding their 50% threshold by 8 percentage points. That arbitrary statistic had nothing to do with my ability to service debt, the building’s actual quality, or my business expansion’s viability. I was being excluded from accessing my own equity based on Fannie Mae warrantability guidelines unrelated to real lending risk.”

Michelle needed a non-warrantable condo cash-out refinance—specialized refinancing for condominiums that don’t meet Fannie Mae/Freddie Mac warrantability requirements, enabling qualified homeowners to access equity despite investor concentration, litigation, commercial space ratios, or other technical factors that disqualify buildings from conventional financing.

Facing similar challenges? Schedule a call to explore your options.

Why Was Michelle Unable to Access Equity Through Conventional Cash-Out Refinancing?

Michelle researched her rejection extensively and learned that conventional cash-out refinancing for condominiums requires warrantability compliance just like purchase financing—meaning buildings with investor concentration above 50%, pending litigation, excessive commercial space, or other disqualifying factors can’t access conventional refinancing regardless of homeowner qualifications or building quality.

Conventional cash-out refinance limitations for condos:

• Must meet Fannie Mae/Freddie Mac warrantability requirements
• Maximum 50% investor concentration for conventional conforming loans
• No significant pending litigation against HOA
• Commercial space below 25-35% thresholds
• Adequate HOA reserves and financial health
• Low HOA dues delinquency rates

Michelle’s Las Olas River House was an excellent building in every objective measure. The HOA maintained 55% funded reserves (exceeding recommended standards), delinquencies were minimal at 2%, no litigation existed, maintenance was excellent, the building was well-managed, and the waterfront location was highly desirable. However, the 58% investor concentration—driven by the property’s appeal to real estate investors who recognized strong rental demand from young professionals working in downtown Fort Lauderdale—exceeded the 50% warrantability threshold by 8 percentage points.

“The building is objectively excellent,” Michelle said. “The HOA has $1.8 million in reserves, professional management, minimal delinquencies, and excellent maintenance. The high investor concentration proves the building attracts investor confidence because of strong rental demand and appreciation potential. But Fannie Mae guidelines treat investor concentration above 50% as disqualifying—regardless of whether that concentration reflects market confidence rather than problems. That’s backwards logic that punishes excellent buildings for being popular with investors.”

The non-warrantable status meant Michelle couldn’t access conventional cash-out refinancing despite having over $320,000 in equity, perfect payment history, strong business income, and excellent credit. Traditional lenders wouldn’t evaluate her actual qualifications—they simply applied Fannie Mae warrantability checklists that excluded her building categorically.

Ready to access equity from a non-warrantable condo? Schedule a call to discuss refinancing options.

What Documentation Was Required for This Non-Warrantable Condo Cash-Out Refinance?

Michelle worked with her non-warrantable condo specialist to document her qualifications and building quality for cash-out refinancing without Fannie Mae warrantability compliance.

Documentation provided:

• Two years of business tax returns (Schedule C showing $175,000 average income)
• Two years of personal tax returns
• Business bank statements verifying cash flow
• 775 credit score with perfect payment history
• Six years of flawless mortgage payment history
• Current mortgage statement ($295,000 balance)
• Bank statements showing substantial business reserves
• Business expansion plan with budget ($145,000 capital requirement)
• HOA financial documents (budget, reserves, meeting minutes)
• Building master insurance
• Condo questionnaire documenting non-warrantable status
• Homeowners insurance (HO6 policy)

The approval process:

1. Initial consultation (Day 1) – Discussed non-warrantable cash-out strategy
2. Application submission (Day 2) – Applied for cash-out refinance
3. Income verification (Days 3-12) – Reviewed business and personal finances
4. Credit review (Days 13-14) – Confirmed 775 score and perfect history
5. Payment history analysis (Day 15) – Verified six years flawless payments
6. HOA financial review (Days 16-22) – Evaluated building management and reserves
7. Business expansion review (Days 23-25) – Analyzed use of proceeds
8. Property appraisal (Days 26-33) – Condo appraised at $615,000
9. Underwriting (Days 34-45) – Comprehensive cash-out analysis
10. Approval and closing (Days 46-52) – Funded non-warrantable cash-out refinance

The lender approved Michelle’s non-warrantable condo cash-out refinance based on her strong $175,000 business income, perfect 775 credit score, six years flawless payment history, conservative post-cash-out loan-to-value (72% with $615K value minus $440K new loan), excellent HOA financial health despite investor concentration, sound business expansion plan, and overall low-risk profile.

Ready to access your equity? Submit a refinance inquiry to explore non-warrantable cash-out options.

What Were the Final Results of This Non-Warrantable Condo Cash-Out Refinance?

Michelle successfully closed on her non-warrantable condo cash-out refinance, accessing $145,000 for business expansion while maintaining her River House residence.

Final details:

• Previous mortgage: $295,000
• Cash-out received: $145,000
• New loan: $440,000
• Property value: $615,000
• Remaining equity: $175,000 after cash-out
• Competitive non-warrantable rates – Non-Warrantable Condo Cash-Out Refinance Loan Calculator
• Loan-to-value: 72% (conservative)
• Investor concentration: 58% (8% above conventional threshold)

Business expansion results (12 months later):

• Revenue increase: 45% from expanded inventory and staff
• Technology improvements: Enhanced efficiency and customer experience
• Additional staff: Three new employees serving growth
• Profitability growth: Business expansion ROI far exceeding mortgage cost
• Market position: Stronger competitive positioning through scale

Michelle’s business expansion transformed her e-commerce company. The $145,000 capital funded comprehensive improvements that increased capacity, enhanced customer experience, and drove 45% revenue growth within 12 months.

“The non-warrantable condo cash-out refinance enabled strategic business growth,” Michelle explained. “I accessed $145,000 at mortgage rates to fund expansion generating 45% revenue growth. My increased profits far exceed the modest mortgage payment increase. I used my home equity strategically to grow my business—that’s intelligent capital deployment that accelerates wealth building across multiple assets.”

When Michelle is ready for additional strategic moves, she may explore non-warrantable condo refinancing for rate optimization or other wealth-building strategies.

Ready to leverage your equity? Get approved or schedule a call.

Key Takeaways

• Non-warrantable condo cash-out refinancing accesses equity despite warrantability issues—Michelle accessed $145K with 58% investor concentration
• Perfect payment history strengthens non-warrantable applications—six years flawless payments proved reliability
• Business tax returns document self-employed income—Schedule C verified $175K earnings
• Conservative LTV ratios protect equity cushions—72% LTV maintained $175K remaining equity
• Home equity can strategically fund business expansion—mortgage rates versus higher business loan costs
• Investor concentration doesn’t indicate poor building quality—often reflects market confidence

Have questions? Schedule a call today.

Alternative Programs

If a non-warrantable condo cash-out refinance isn’t perfect, consider:

• Non-Warrantable Condo Refinance – Rate improvement without cash-out
• HELOC – Revolving credit line (if available for non-warrantable condos)
• Bank Statement Loan Cash-Out – Alternative for self-employed
• Portfolio Loan – Complex situations

Explore all loan programs.

Resources

Learn more:

• Non-Warrantable Condo Guide
• Cash-Out Calculator

Similar stories:

• Non-warrantable purchase
• Non-warrantable refinance

External resources:

• Fannie Mae Condo Standards

Need local expertise? Get introduced to partners including condo-specialist realtors and HOA advisors.