There's multiple situations to consider in a unit like this. Regarding the 20% down, yes, it's because it's Non-Warrantable and most FNMA lenders and brokers will not finance a unit if the concentration is below 50% owner occupied. It's not impossible to finance the unit, however, you just have to know what banks to speak with. Mt. Washington Bank, a division East Boston Savings Bank, are extremely familiar with these loans, and typically will portfolio such a loan, if it makes sense. By portfolio, I mean they will hold onto and service the note, and not sell it off, like a broker or traditional FNMA lender.
What's most likely happened in the building is that as rents have skyrocketed in town, unit owners have realized they can earn a significant cash flow by renting their units instead of selling them. This, coupled with low interest rates, have created that crushing demand of late, because there's no inventory in South Boston. And if there is, it's crushed with 7 offers the day of the open house, all over asking.
If you'd like the contact at Mt. Washington, feel free to email me: Andrew@Capresidential.com, or come by and see me if you're in town at 611 E Broadway. Best of luck.