Non-warrantable condos are condominiums that do not meet the guidelines set by larger government investors like Fannie Mae or Freddie Mac. This means the loans are not insurable by those investors. This could be for a number of reasons, such as the unit being a condo-hotel, mixed use with commercial, a high concentration of bank owned in the building, or a higher concentration of investors in the association.
The good news is..although financing might be difficult to get, there are still some avenues available for them to take if they really want to buy the property. However, interest rates and down payments could be higher.