Condo Questionnaire : Meaning, Limitations, Example

A condo questionnaire is a detailed form completed by a condominium association or its management company to provide essential information about the building or community. Lenders typically require this document during the mortgage approval process when a buyer is purchasing a unit in a condo development. It helps the lender assess the financial health of the association, potential risks, and whether the property meets underwriting guidelines.

The questionnaire includes questions about the number of owner-occupied units, delinquency rates, insurance coverage, reserves, ongoing litigation, and upcoming special assessments. Lenders use this data to determine if the condo is eligible for financing, particularly for loans backed by Fannie Mae, Freddie Mac, or FHA.

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How a Condo Questionnaire Works

Once a buyer applies for a mortgage on a condo, the lender sends the condo questionnaire to the HOA or property management company. The association must then complete and return it, often for a fee. The lender reviews the answers to ensure the building meets their criteria such as having sufficient reserves, no major pending lawsuits, and a healthy owner-occupancy ratio. If the condo fails to meet these standards, the loan might be denied, or the lender may ask for additional documentation or conditions.

Some buildings are “warrantable,” meaning they meet agency guidelines and pose lower risk to lenders. Others are “non-warrantable,” which can make financing more difficult, expensive, or limited to specialized lenders.

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Limitations and Risks of Condo Questionnaires

While useful, condo questionnaires can create delays or complications during the mortgage process. If the HOA is slow to respond or charges a high fee to complete the form, it can hold up loan approval. Worse, if the answers reveal financial instability—like low reserves, high delinquency, or upcoming special assessments the lender might withdraw the loan offer entirely.

Another limitation is that not all buyers realize this step exists until they’re deep in escrow. A seemingly perfect unit can become unfinanceable because of broader issues with the building or HOA. That’s why agents and buyers should verify the building’s status early in the process.

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Real-World Example

A buyer finds a great deal on a condo in a large complex and gets pre-approved for a conventional loan. During underwriting, the lender sends a condo questionnaire to the HOA. The completed form reveals that more than 25% of the owners are behind on their dues and that the HOA is involved in a lawsuit over building defects. Because of this, the condo is considered non-warrantable. The buyer’s loan falls through, and they must either find a new lender or back out of the deal entirely. The unit itself was fine—but the building’s risk profile wasn’t.

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Why It Matters in Real Estate

The condo questionnaire is a behind-the-scenes but essential part of condo financing. It protects lenders from risky developments and gives buyers insight into how well the building is managed. For agents, it’s a tool to flag red flags early. For investors, it can reveal whether a unit will be easy to resell or refinance down the line. A strong, transparent HOA usually signals long-term value. A messy one can turn a good-looking deal into a long-term headache.

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Final Thoughts

Buying a condo involves more than just liking the unit—you’re buying into a shared financial ecosystem. The condo questionnaire is the document that exposes how that system works. While it might seem like paperwork, it has the power to make or break your deal. If you're buying a condo, don’t wait for surprises. Ask about the building’s financials, reserves, and litigation history upfront because what’s on that form can change everything.