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Buying a condo in Hawaii | Makai Mortgage

Buying a Condo or Condotel in Hawaii

The condominiums and condotels in Hawaii differ significantly from those anywhere else in the United States. This is true because the condo projects here possess some unique characteristics.

When shopping for a condo in Hawaii, you will encounter three different classifications. The required down payment and interest rate available to you will depend greatly upon which category the condo you select falls into.

At Makai Mortgage, we specialize in financing Hawaii condos – but beware that most mainland lenders do not have the experience required to lend on most Hawaii condos. Even worse, the fact that the mainland bank cannot lend on these properties is often not recognized until well into the loan process and long after your loan was “approved.” If you are in the market for a Hawaii condo, we cannot stress to you enough the importance of partnering with a local lender.

While shopping for your perfect condo, it will be helpful if you are familiar with the following classifications:

  • Condominium – warrantable
  • Condominium – non-warrantable
  • Condotel


A warrantable condo is one that meets “Agency” guidelines. “Agency” loan programs are Fannie Mae, Freddie Mac and government programs: VA, FHA, and USDA. Whether a condominium is considered Warrantable and thereby financeable with an “Agency” loan is dependent upon a variety of factors, including but not limited to:

  • Does the property offer Vacation Rentals? A lease of less than six months is considered a short-term rental otherwise known as a vacation rental.
  • Are condo documents available or obtainable? A second important requirement to be classified as “warrantable” is the completion, by the property manager, of a Form RR105C, otherwise known as a condo questionnaire. There are potential issues that can arise from the RR105C, which could result in the property being classified as non-warrantable. Working with a Makai Mortgage loan officer allows the flexibility of financing the property with one of our proprietary condo loan programs; see the non-warrantable section below for more information.


Non-warrantable condos are not eligible for the “Agency” loan programs outlined above. Your Loan Officer will assist you in determining whether the condo you’ve selected is warrantable or non-warrantable. If your condo project does not meet the Agency criteria, Makai Mortgage can offer you one of our proprietary condo loans at a competitive rate.

If any of the following information is reported on the RR105C (aka condo questionnaire), the condo will be classified as non-warrantable and will not be eligible for an Agency loan.

  • Pending litigation will be considered on a case-by-case basis to determine if the condo needs to be financed with a non-warrantable condo loan 
  • More than 10% of the owners are delinquent on HOA fees
  • More than 10% of the annual budget is from HOA owned condos


A condotel, a shortened version of “condo hotel,” features many amenities that one might find in a hotel, such as a front desk for check-ins, a concierge or activities desk, and maid service. Many condominium properties in Hawaii operate as condotels due to Hawaii being a very popular vacation destination.

Please note: Condos no longer need a full sized kitchen to be financeable.



For any questions, or if you’d like to get started with the pre-approval process contact us or apply now.