For condo financing, the lender reviews both the borrower and the condominium project. The purpose is to confirm that the HOA is financially stable, properly managed, and not facing issues that could affect the unit’s value or marketability.
Some lenders use detailed condo questionnaires that can run three or eight pages. For example, Fannie Mae’s Condominium Project Questionnaire asks for extensive information about the association, budget, insurance, repairs, litigation, ownership, and more: View Fannie Mae’s condo questionnaire.
On the other hand, I work with a Non-QM lender that uses a streamlined one-page condo questionnaire for properties in every state except Florida. It focuses on the key items needed to quickly identify whether a project may qualify.
The Main Questions
Total number of units
This establishes the size of the condominium project. Lenders use it as the starting point for calculating delinquency, investor concentration, and other important project ratios.
Number of units more than 60 days delinquent on HOA dues
This shows whether unit owners are paying their association fees. Too many delinquent owners can leave the HOA without enough income for insurance, maintenance, utilities, repairs, and reserve funds.
Total owner-occupied units
Owner-occupied units generally indicate a more stable community. Owners who live in the building are often more invested in maintenance, governance, and preserving property values.
Total investor-owned units
Lenders review the percentage of rentals because a heavily investor-owned project can have more tenant turnover and may be less stable during a market downturn. A higher rental concentration can also affect which loan programs are available.
Does one person or entity own 25% or more of the units?
A single owner with a large share of the project can create concentration risk. If that owner stops paying HOA dues, sells units quickly, or experiences financial problems, it can materially affect the entire association and the value of the remaining units.
Is there any pending litigation?
Pending litigation may indicate construction defects, safety concerns, insurance disputes, financial claims, or other serious issues. Depending on the lawsuit, lenders may need more documentation or may be unable to finance units in the project until the matter is resolved.
If you want to get your condo financed easily, contact me at 347-794-1592 or josh@b2bfundingllc.com