The condo pre-sale gate

Banks want 50 to 70% of units under binding contract with deposits before they’ll release construction funds. Debt funds will go as low as 0 to 25%, at a wider spread. Here’s the actual gate.

THE CORLAN DESK · UPDATED 31 AUGUST 2026 · 5 MIN READ

KEY TAKEAWAYS

Banks typically require 50-70% of units under binding contract with deposits before releasing construction funds.
Debt funds will lend at 0-25% pre-sale, at a meaningfully wider spread than bank construction paper.
End-buyer warrantability under Fannie Mae’s 2026 condo rules governs how easily unit buyers can get their own financing, and therefore how fast absorption actually happens.
The pre-sale number isn’t a formality, it’s the single input that decides which lender pool is even available.

The gate nobody explains clearly

Every condo developer eventually learns this the hard way if nobody tells them first: the pre-sale percentage isn’t a box to check for the lender’s file, it determines which lenders will even look at the deal, and at what spread.

PRE-SALE REQUIREMENT BY LENDER TYPE

BANK

50-70%

Under binding contract with deposits

DEBT FUND

0-25%

Wider spread, funds ahead of absorption

Illustrative, drawn from live placement. Exact thresholds vary by lender, market and unit count.

Why warrantability matters as much as the number

A pre-sale contract is only as good as the buyer’s ability to actually close on it. Fannie Mae’s 2026 condo project rules govern whether individual units in the building qualify for conventional financing at all, warrantability. A project that fails warrantability review can have a strong pre-sale number on paper and still struggle at closing, because buyers can’t get mortgages.

"The pre-sale number gets the headline. Warrantability decides whether that number survives contact with actual closings."

What this means for financing strategy

If your absorption plan can’t realistically hit bank thresholds early, price the debt fund option into the pro forma from day one rather than treating it as a fallback. The spread is real, but so is the cost of a construction loan that stalls waiting on pre-sales a bank-only structure needed and the market wasn’t giving fast enough.