Condo warrantability is the quietest deal killer in Denver.
Denver has more condo inventory than any other Front Range market, and a meaningful share of it will not finance conventionally. Investor concentration, pending litigation, inadequate reserve funding, and commercial square footage can all render a building non-warrantable. When that happens, Fannie Mae and Freddie Mac will not buy the loan, and a buyer who was fully approved on Monday can be dead on Thursday.
I pull the HOA questionnaire and the budget early rather than at the end of underwriting. If a building is going to be a problem, you should learn that before you write an offer, not after your inspection objection deadline has passed. Non-warrantable financing does exist through portfolio lenders, and I have those relationships, but the terms are different and you deserve to know that going in.
Denver legalized accessory dwelling units citywide, and most buyers have not caught up.
For years, ADUs were permitted only in certain zone districts, which made them rare enough that lenders and appraisers treated them as an oddity. That changed. A property with a legal ADU now has a different financing profile than the same house without one, because rental income from the unit can sometimes be used in qualifying.
Whether it counts depends on the loan program, whether the unit is legally permitted, and whether the appraiser can find comparable properties. Those are answerable questions, but they need to be answered before you are under contract, not discovered during underwriting.
House hacking works better in Denver than most people realize.
Denver's older neighborhoods are full of duplexes and homes with basement units, and owner occupied financing on a two to four unit property carries dramatically better terms than an investment loan on the same building. You live in one unit and rent the others.
The catch is that self sufficiency rules and rental income calculations vary by loan type, and the wrong program can eliminate the strategy entirely. This is worth structuring deliberately rather than discovering by accident.
