What Is a Condo Questionnaire? A Guide for Lenders and Loan Officers

What a Condo Questionnaire Actually Is

A condo questionnaire is a standardized form that the HOA or its management company fills out to give lenders a snapshot of the community's financial health, insurance coverage, and legal standing. Think of it as a background check — but for the entire condo project, not just the borrower.

Fannie Mae and Freddie Mac both require this form before they'll approve a conventional mortgage on a condo unit. No questionnaire, no loan. It's that simple.

The two main versions are the Fannie Mae Form 1076 (full review) and Form 1077 (limited review). Freddie Mac has its own equivalents. Which one you need depends on the project type and the loan scenario.

Why Lenders Care So Much

Lenders aren't just lending against a unit — they're lending against a unit inside a shared financial structure. If the HOA is underfunded, uninsured, or in litigation, that affects the collateral value.

Here's what the questionnaire reveals:

• •Budget and reserves: Is the HOA collecting enough to cover expenses? What percentage of the budget goes to reserves? A reserve funding level below 10% is a red flag for most underwriters.
• •Delinquency rates: If more than 15% of unit owners are 60+ days delinquent on assessments, most conventional loans won't be approved. That's a hard cutoff.
• •Insurance coverage: The HOA's master policy must meet minimum coverage thresholds. Gaps in coverage can kill a deal faster than a bad appraisal.
• •Litigation: Pending lawsuits — especially construction defect claims — can make a project ineligible for conventional financing entirely.
• •Owner-occupancy ratio: Fannie Mae generally wants at least 50% of units to be owner-occupied for a full review approval. Below that, you're looking at limited review or possible denial.

The Ordering Process

This is where things get frustrating. Unlike estoppel letters or resale packages, condo questionnaires aren't governed by state statute in most places. There's no legally mandated turnaround time.

You order the questionnaire from the HOA's management company, and they fill it out when they get around to it. Typical turnaround is 5-15 business days, but I've seen it take a month.

Costs range from $150 to $400 depending on the management company. Some charge separately for the questionnaire and the supporting documents (financial statements, insurance certificates, etc.). Others bundle everything.

Pro tip: Order the condo questionnaire the same day you order the appraisal. Both take time, and there's no reason to wait.

Common Problems That Delay Loans

Insufficient reserves. The most common issue. Fannie Mae wants to see reserves funded at a reasonable level. If the reserve study shows the HOA is underfunded, the underwriter will flag it.

Missing insurance. The master policy needs to cover the full replacement cost of the building. When it doesn't, the lender may require the HOA to increase coverage before the loan closes — which can take weeks.

High delinquency. That 15% threshold trips up more projects than you'd expect, especially in communities with a lot of investor-owned units. If the association is close to the line, ask for the most current delinquency report, not last quarter's.

Incomplete responses. Management companies sometimes skip questions or provide vague answers. An incomplete questionnaire means the underwriter sends it back, and the clock resets. Make sure every field is filled in before submitting.

Full Review vs. Limited Review

Full review (Form 1076): Required for most condo purchases with conventional financing. The management company fills out a detailed questionnaire covering finances, insurance, litigation, and project details. The lender's underwriting team reviews every line.

Limited review (Form 1077): Available for certain transactions — typically refinances, investment properties, or projects that already have a full review on file. Less documentation required, but the project still needs to meet basic eligibility criteria.

PERS (Project Eligibility Review Service): For projects that don't meet standard guidelines, Fannie Mae offers PERS as a manual review option. It costs more and takes longer, but it's sometimes the only path to approval.

What Loan Officers Should Watch For

Pending special assessments. If the HOA has voted on a special assessment but hasn't yet billed it, that obligation exists but might not show up on the borrower's credit report. Ask about it directly.

Litigation that affects insurability. Construction defect lawsuits are the big one. If the HOA is suing the developer, some insurers won't renew the master policy, which creates a chain reaction of problems.

Commercial space percentage. If commercial space exceeds 35% of the total project square footage (25% for Fannie Mae in some cases), the project may be ineligible. This comes up in mixed-use developments more than people expect.

Single-entity ownership concentration. If one entity owns more than 20% of the units (sometimes 10% for smaller projects), that's a concentration risk flag. Common in newer developments where the builder still holds unsold units.

Timing Is Everything

The biggest mistake I see is treating the condo questionnaire as an afterthought. Loan officers who wait until underwriting to order it end up scrambling.

Order early. Review the responses before submitting to underwriting. If something looks off — low reserves, high delinquency, litigation — flag it immediately. You'd rather know on day 5 than day 25.

For lenders processing volume in condo-heavy markets like South Florida, Phoenix, or Seattle, having a system for tracking questionnaire orders is essential. A single missing questionnaire can hold up a closing that's otherwise ready to fund.

The condo questionnaire isn't glamorous. But it's one of those documents where paying attention to the details upfront saves everyone time and money on the back end.