What the ratio actually measures
Every condominium project review sorts the units into three buckets: principal residences, second homes, and investment properties. The owner-occupancy ratio is the first bucket as a share of the total. The investor-concentration ratio is the third, and sometimes the third plus the second, depending on which rule is being applied. The two are mirror images of the same count and people use the names interchangeably, which is the first source of confusion on this topic.
The classification follows how the owner uses the unit, not who is standing in it. A unit rented to a long-term tenant is investor-owned. A unit the owner occupies four months a year and leaves empty the rest is a second home, not an investment property, and not a principal residence. A unit owned by an adult child's parents and lived in by the child is generally investor-owned even though a family member lives there. A vacant unit is classified by intent, and intent is exactly what a form cannot capture.
The denominator is the total number of units in the project. Unsold units still held by the developer sit in that denominator and skew the ratio in a project that has not sold out, which is one reason new and established projects are assessed under different rules rather than the same one.
Two things this ratio is not. It is not a measure of how well the building is run: an association of long-term landlords who all pay on time is in better financial health than an association of owner-occupants who do not. And it is not the same test as condotel character, which asks how the project is operated rather than who owns it. A high investor share is a reason to look harder at transient use. It is not a finding of transient use.
How a buyer finds out
The counts reach a lender through the condominium project questionnaire, which the association or its manager completes and signs. Fannie Mae and Freddie Mac publish a joint form for this. The association is asked to state how many units are owner-occupied, how many are second homes and how many are investor-owned, and a lender may accept a substantially similar form.
What matters is where the association gets those numbers. Most associations do not survey owners annually. The count is commonly derived from the address the assessment bill goes to, which misclassifies an owner who has their mail sent to an office, and from the manager's impression of who is renting. Where units are being let nightly the classification breaks down entirely, because a unit rented by the night is neither owner-occupied nor tenant-occupied in the ordinary sense. Ask how the figure was produced, not just what it is.
The harder point is that a buyer cannot verify conventional eligibility themselves. Fannie Mae's project tool is restricted to approved seller/servicers and, in limited form, correspondent lenders; mortgage brokers and the general public have no access. Fannie Mae's separate status tool is open to associations, management companies and authorised advisors after registration, and Fannie Mae's own guidance is that homebuyers must ask their lender or their association to check. Freddie Mac's project tool is seller-facing. FHA's project lookup is genuinely public, but it reports whether a project is approved, not what the current occupancy mix is.
So the practical route runs through two people: the loan officer, who can have the project reviewed, and the association, which holds the underlying count.
What changed in 2026, and why it matters
This is where almost all published content on the subject is now wrong.
Fannie Mae retired its 50 percent investor-concentration limit. Lender Letter LL-2026-03, dated 18 March 2026, states that lenders may take advantage of the change immediately. There is no longer a Fannie Mae ceiling on the share of units held as investment properties. The limit that appears in nearly every article, forum post and lender explainer written before that date is a retired rule.
Freddie Mac retired the 50 percent owner-occupancy requirement for Established Condominium Projects, along with the owner-occupancy project waiver category, in Bulletin 2026-C. The scope of that retirement is narrow and getting it right is the whole point: Freddie Mac's own guidance states that the requirement was retired only for Established projects, and that sellers must still confirm compliance with the owner-occupancy requirements for New Condominium Projects. Freddie Mac's dividing line between the two is published: an Established project is one where at least 75 percent of units have been conveyed to purchasers other than the developer and the unit owners control the association. A project that fails either half of that test is New, and the owner-occupancy requirement still reaches it. The percentage that applies to New projects is not stated in Freddie Mac's publicly retrievable material, so no figure for it appears on this page.
A third 2026 change compounds both. For applications dated on or after 3 August 2026, Fannie Mae retired its Limited Review and Freddie Mac retired its Streamlined Review, the two abbreviated paths that let a lender clear an established project without a full examination. Those abbreviated reviews carried occupancy-linked loan-to-value caps of their own. They are gone, and the projects that used to travel through them now get a Full Review instead. The net effect of 2026 is fewer occupancy rules and more projects examined closely.
Where an occupancy percentage still binds
Three of the four rulebooks are not the GSEs, and they did not all move.
FHA
FHA still applies an owner-occupancy minimum, and it is the reason this condition remains a genuine obstacle for some buyers. HUD's published standard is that approved condominium projects have a minimum of 50 percent of units occupied by owners for most projects, announced with the 2019 condominium rule and stated in HUD's own press release of 14 August 2019. HUD's research publication describes an exception floor of 35 percent in limited, low-risk situations with additional oversight. HUD's public knowledge base sets out a further breakdown by context, including a lower minimum for new construction, a higher one for two- to four-unit projects, and separate figures applied at the loan level rather than at project approval. That knowledge article carries no visible revision date, so the sub-breakdown is worth confirming with the lender rather than relying on any republished table, including this one.
The underlying regulation, 24 CFR 203.43b, does not fix the number. It sets a permitted range of 30 to 75 percent and leaves HUD free to set the operative figure inside it by notice or handbook. That is why FHA occupancy numbers drift, and why any page quoting one without a date should be treated as unreliable.
VA
VA's condominium regulations at 38 CFR 36.4360 to 36.4362 contain no owner-occupancy, investor-concentration or commercial-space percentage at all. That absence is not an oversight; it reflects a different kind of review. VA approves the project's legal documents — the declaration, the bylaws and the enabling instruments — against a list of required rights and prohibited restrictions. The ownership mix is not one of the things it measures.
Conventional, after the changes
For an established project and a conventional loan, occupancy mix is no longer the gate it was in 2025. It has not vanished — a high share of investment and second-home ownership remains a published reason to look harder at whether a project operates as transient lodging — but it prompts further review rather than failing a project.
What people get wrong
"The building is over 50 percent investors so it is non-warrantable." Not since 18 March 2026, for Fannie Mae. Warrantable means the project meets the standards that let a lender sell the loan to Fannie Mae or Freddie Mac, and the specific standard behind that sentence no longer exists at Fannie Mae. This is the single most repeated stale fact in condominium financing.
Freddie Mac did not retire owner-occupancy across the board. Established projects only. A project still in developer control, or with fewer than 75 percent of units conveyed, is a New project and is still tested.
Owner-occupancy is not delinquency. They are separate tests, measured separately, and they fail differently. Both agencies still apply a delinquency test — no more than 15 percent of units 60 or more days past due on common expense assessments, with special assessments tested separately. A building full of renters whose owners all pay is fine on that test.
Investor concentration is not single-entity ownership. Investor concentration counts units across many separate owners. Single-entity ownership counts units held by one owner, and that limit was not retired. A project with 60 percent investor-owned units spread across 60 owners is treated very differently from one where a single entity holds 30 percent.
A high investor share is normal in some markets and unremarkable in itself. Urban buildings near universities, employment centres and transit routinely run high, and always have. What the ratio deserves is a follow-up question about how those units are let — annually or nightly — not an assumption.
What to do about it
Ask the lender which ruleset your application date falls under. This sounds bureaucratic and it is decisive. Fannie Mae's investor-limit retirement was effective immediately in March 2026; the abbreviated review paths ended for applications dated on or after 3 August 2026; Fannie Mae's replacement-reserve minimum rises from 10 to 15 percent for Full Reviews on applications dated on or after 4 January 2027. Whether a project clears can turn on the date on the application rather than on anything about the building.
Ask the association for the occupancy count and how it was derived. A count taken from billing addresses is not the same as a count taken from a survey, and the difference can be material in a building with a lot of absentee owners.
Ask separately about rental character. The count gives the ownership mix. It does not say whether there is a rental pool, a registration desk or nightly letting, and those questions carry far larger consequences than the ratio does.
If the loan is FHA, check the project's approval status directly. HUD's FHA-approved condominium lookup is public and free. It will tell you whether a project appears in FHA's system and what its status and expiry dates are. It will not tell you the current occupancy mix, whether FHA's insurance concentration ceiling in the project has already been reached, or whether a unit is financeable — those remain questions for the lender.
Know the boundary. Nobody outside a lender can confirm conventional project eligibility, because the tools that hold the answer are not open to buyers. Where the ownership structure is complicated — units held through entities, trusts, or affiliated companies — the classification question is one for a real estate attorney rather than for the management office.
Common questions
Is a condo with more than 50 percent investors still non-warrantable?
Not on that ground alone at Fannie Mae. Fannie Mae retired its 50 percent investor-concentration limit in Lender Letter LL-2026-03, dated 18 March 2026, effective immediately. Freddie Mac retired the 50 percent owner-occupancy requirement for Established Condominium Projects in Bulletin 2026-C but kept an owner-occupancy requirement for New projects. A project can still fail for other reasons, including single-entity ownership, commercial floor area, delinquency, critical repairs or litigation.
Does FHA still require 50 percent owner-occupancy?
Yes. HUD's published standard, announced with the 2019 condominium rule, is a minimum of 50 percent owner-occupancy for most approved projects, with an exception floor of 35 percent in limited, low-risk situations with additional oversight. HUD's knowledge base sets out lower and higher figures for new construction, small projects and loan-level tests. The underlying regulation permits HUD to set the figure anywhere between 30 and 75 percent, so confirm the current number with the lender.
Does the VA have an owner-occupancy requirement for condos?
No. VA's condominium regulations at 38 CFR 36.4360 to 36.4362 contain no owner-occupancy, investor-concentration or commercial-space percentage. VA's review is a legal review of the project's declaration, bylaws and enabling documents against a list of required rights and prohibited restrictions, rather than a review of financial ratios. That is the structural difference between VA approval and every other rulebook.
How is the owner-occupancy percentage calculated?
Owner-occupied units divided by total units in the project, including unsold developer-held units in the denominator. Classification follows how the owner uses the unit: principal residence, second home, or investment property. Long-term rentals are investor-owned. Second homes are neither owner-occupied nor investment in most formulations, which is why the same building can be described with two different percentages depending on which rule is being applied.
Can a buyer look up whether a condo is warrantable?
No, not for conventional financing. Fannie Mae's project manager is restricted to approved seller/servicers, and its status tool is open to associations, managers and authorised advisors after registration; Fannie Mae's guidance is that homebuyers must ask their lender or their association to check. Freddie Mac's tool is seller-facing. Only FHA publishes an open lookup, and it reports approval status rather than warrantability.
Is a high investor ratio a sign the building is a condotel?
It is a prompt to check, not a finding. A high share of units held as investment or second homes appears on the published list of characteristics that warrant additional due diligence, because a building of non-resident owners raises the question of on what terms the units are occupied. But a project full of annual unfurnished leases with no rental pool, no registration desk and no hospitality services is not a condotel. The two tests measure different things.