You found the condo, negotiated the contract, completed the inspection, and started working with your lender. Then your lender asks the condominium association or management company to complete something called a condo questionnaire.
For many buyers, this is the first time they realize that mortgage approval for a condominium can involve more than evaluating their own income, credit, assets, and the value of the unit.
The lender may also evaluate the condominium project itself.
A condo questionnaire is one of the tools lenders use to gather information about the association, building, ownership, insurance, finances, litigation, leasing, and other characteristics that may affect whether the condominium meets the requirements of the buyer's loan program.
This can make the questionnaire an important part of a financed condo purchase, particularly in Atlanta's many high-rise and condominium communities.
Here is what buyers should know about condo questionnaires, what lenders may be looking for, and why a financially qualified buyer can sometimes encounter a financing problem because of the building rather than the individual unit.
Explore our Atlanta condo building guides, browse condos for sale, or contact The Agency Atlanta Intown for help evaluating an Atlanta condominium purchase.
What Is a Condo Questionnaire?
A condo questionnaire is a document used by a lender or its underwriting team to collect information about a condominium project.
The questionnaire is generally completed using information supplied by the condominium association, management company, or another authorized source.
The exact form and questions can vary depending on the lender, loan program, and type of condominium review being performed.
Questions may address subjects such as:
- Number of units in the condominium
- Owner occupancy
- Rental activity
- Association assessments
- Delinquent HOA accounts
- Association finances
- Insurance
- Pending litigation
- Special assessments
- Commercial or nonresidential space
- Ownership concentration
- Property condition
- Major repairs or deferred maintenance
The lender uses the information as part of determining whether the condominium project satisfies the requirements applicable to the mortgage being requested.
The Lender Is Evaluating More Than the Buyer
When purchasing a detached single-family home, mortgage underwriting focuses heavily on the borrower and the property being pledged as collateral.
With a condominium, another financial entity becomes relevant: the condominium association.
The association may be responsible for major components such as:
- Roof
- Exterior
- Elevators
- Parking structures
- Common plumbing
- Fire-safety systems
- Swimming pools
- Common mechanical systems
- Hallways and lobbies
- Other common elements
If the association experiences serious financial, structural, insurance, or legal problems, those issues can affect individual owners and potentially the marketability of units within the project.
That is why lenders may evaluate the condominium as a whole.
Why Does the Condo Questionnaire Matter?
The questionnaire matters because the answers can affect whether a lender is willing or able to finance a unit in that particular condominium.
A buyer can have excellent credit, substantial income, a large down payment, and an otherwise strong loan application and still encounter a problem if the condominium does not satisfy applicable project requirements.
This distinction is important:
Borrower approval and condominium project approval are not necessarily the same thing.
What Does "Warrantable Condo" Mean?
Buyers may hear lenders or real estate professionals describe a condominium as "warrantable" or "non-warrantable."
In general usage, a warrantable condominium is one that satisfies the applicable project eligibility requirements for certain conventional mortgage programs, particularly those associated with Fannie Mae or Freddie Mac.
A non-warrantable condominium has one or more characteristics that prevent it from meeting the applicable guidelines for the loan being considered.
That does not necessarily mean the building is unsafe, poorly managed, or a bad place to live.
It means the condominium may not satisfy a particular mortgage program's requirements.
Non-Warrantable Does Not Mean Unfinanceable
This is an important distinction.
A condo that does not qualify for one conventional financing program may still be financeable through another lender or loan product.
Depending on the circumstances, alternatives might include:
- Portfolio lending
- Different conventional loan structures
- Other specialized condominium financing
- Cash purchase
Loan availability, rates, down-payment requirements, and underwriting standards can differ considerably.
That is why buyers considering a condo with known financing complications should speak with a lender experienced in condominium financing early in the process.
What Information Is Typically on a Condo Questionnaire?
Although questionnaires vary, several topics commonly receive attention.
Owner Occupancy and Rental Activity
The lender may ask how many units are:
- Owner occupied
- Second homes
- Investor owned
- Rented
The lender may also evaluate whether the association has leasing restrictions, short-term rentals, or other rental characteristics relevant to the applicable loan program.
Rental concentration does not automatically prevent financing, but it can be relevant depending on the type of loan and project review.
HOA Delinquencies
The questionnaire may ask about owners who are delinquent on their association assessments.
This matters because condominium associations depend on owners paying assessments to operate the property.
If a significant number of owners stop paying, the association may have difficulty funding:
- Insurance
- Utilities
- Repairs
- Staff
- Maintenance
- Reserve contributions
Delinquencies can therefore be both a financial-management issue and a lending issue.
Association Budget and Reserves
Lenders may review aspects of the condominium's budget and reserve funding.
Reserves are funds accumulated for future capital repairs and replacements.
Depending on the building, reserves may eventually be needed for:
- Elevators
- Roofing
- Exterior repairs
- Waterproofing
- Parking structures
- Mechanical systems
- Common-area improvements
Reserve funding can be especially important in larger and older condominium buildings where major capital projects can be expensive.
Related reading: How to Read Condo Financial Statements Before Buying
Special Assessments
The questionnaire may ask whether there are current or planned special assessments.
A special assessment is an additional charge to owners beyond their regular monthly HOA assessment.
Special assessments may be used for major projects such as:
- Roof replacement
- Elevator modernization
- Parking garage repairs
- Exterior work
- Water intrusion remediation
- Major mechanical replacement
A special assessment does not automatically make a condominium ineligible for financing.
However, a lender may want to understand why the assessment exists, how much remains outstanding, how it is being paid, and whether it relates to significant property-condition concerns.
Insurance
Insurance has become an increasingly important component of condominium underwriting.
The lender may need information about the association's master insurance policies and whether coverage satisfies the requirements of the applicable loan program.
Depending on the project, this may involve reviewing coverage related to:
- Property
- Liability
- Fidelity or crime
- Flood risk where applicable
- Other required coverage
Buyers should not assume that because the association has insurance, the coverage will automatically satisfy every lender's requirements.
Litigation
The questionnaire may ask whether the condominium association is involved in litigation.
Not every lawsuit creates the same level of concern.
A routine collection matter is very different from litigation involving major structural defects, construction problems, insurance coverage, or substantial potential financial liability.
If litigation exists, the lender may request additional information before determining whether financing can proceed.
Structural and Property-Condition Issues
Condominium project reviews may also examine significant property-condition concerns.
Questions can involve:
- Structural problems
- Deferred maintenance
- Unsafe conditions
- Major building-code issues
- Required inspections
- Significant repairs
This is particularly important for older condominium buildings approaching major repair cycles.
Commercial Space
Some condominium developments contain restaurants, retail stores, offices, hotels, or other commercial components.
The lender may ask how much of the project is dedicated to commercial or nonresidential use.
Mixed-use development is common in urban areas, but the project's structure still has to fit the applicable lender and loan-program guidelines.
Single-Entity Ownership
The questionnaire may ask whether one person, investor, developer, or related entity owns multiple units in the project.
High ownership concentration can matter because it may give one party significant financial or operational influence over the condominium.
Again, the applicable thresholds depend on the loan program and project.
Why Atlanta Condo Buyers Should Care
Atlanta has a diverse condominium market.
Buyers can choose among:
- Luxury high-rises
- Older residential towers
- Loft conversions
- Mixed-use developments
- Low-rise condominiums
- Townhome-style condominium communities
- New construction
These properties can have very different financial structures, insurance arrangements, ownership patterns, amenities, and maintenance responsibilities.
A lender familiar primarily with detached suburban homes may not encounter these issues as frequently as a lender who regularly finances Atlanta condos.
Midtown Condo Buyers Should Address Financing Early
Midtown contains a particularly broad range of condominium buildings, from older towers to newer luxury high-rises.
Buildings may differ in:
- Age
- Number of units
- Rental concentration
- Commercial components
- Reserve funding
- Insurance
- Amenities
- Upcoming capital projects
If you are financing a Midtown condo, it can be helpful to identify potential project-review issues before getting too far into the transaction.
Explore our Midtown condo building guide.
Buckhead Condos Can Present Similar Issues
Buckhead's condominium inventory ranges from established luxury buildings to newer towers and mixed-use developments.
Some have extensive amenities, staffing, parking structures, elevators, and other costly common elements.
That makes association finances and project eligibility important considerations for buyers.
Explore our Buckhead condo building guide.
Who Completes the Condo Questionnaire?
The buyer typically does not complete the questionnaire.
The information generally comes from the condominium association, property manager, management company, or another party authorized to provide project information.
The lender or a third-party service working with the lender may order the questionnaire.
Procedures vary by association and lender.
Is There a Fee for the Questionnaire?
Often, yes.
Condominium associations or management companies may charge a fee to prepare or process lender questionnaires, association documents, certifications, or related information.
Fees and turnaround times vary by building and management company.
Buyers should determine early who is responsible for ordering and paying for the questionnaire under their particular transaction.
How Long Does a Condo Questionnaire Take?
There is no universal turnaround time.
Some associations respond quickly. Others may require several business days or longer, particularly if the lender requests follow-up documents.
Potential delays can occur when:
- The association uses a third-party document service
- Additional insurance information is required
- Financial statements need clarification
- Litigation requires further review
- The lender requests updated information
- The association or management company responds slowly
This is one reason the condominium review should not be left until the final days before closing.
The Questionnaire Can Reveal Problems Late in the Transaction
A buyer may receive loan preapproval before ever selecting a property.
That preapproval generally focuses on the buyer.
After the buyer goes under contract on a condominium, the lender can begin evaluating the specific project.
If the project review identifies an issue, the transaction may face additional underwriting requirements or the buyer may need a different financing solution.
This can happen after the buyer has already:
- Paid earnest money
- Completed an inspection
- Paid for an appraisal
- Paid lender fees
- Made moving plans
That is why experienced condo buyers and their agents try to identify known financing issues as early as possible.
Ask Whether the Building Has Had Recent Financing Problems
Before making an offer, it can be useful to ask whether recent buyers in the building have experienced financing difficulties.
This does not replace the lender's current project review.
Loan guidelines, building conditions, insurance policies, and association finances can change.
But previous transactions may identify areas worth investigating early.
Do Not Assume a Previous Loan Approval Guarantees Yours
A seller may say:
"The buyer next door got conventional financing."
That information can be encouraging, but it is not a guarantee.
The prior transaction may have involved:
- A different lender
- A different loan program
- A different down payment
- Different project information
- Different underwriting requirements
- An earlier version of the association's insurance policy or financial statements
Each buyer's lender must make its own determination.
Cash Buyers Should Care Too
A cash buyer may not need a lender's condo questionnaire to complete the purchase.
That does not mean the underlying questions are irrelevant.
Consider future resale.
If many future buyers cannot obtain conventional financing in the building, the potential buyer pool could be smaller.
Cash buyers should therefore consider many of the same issues:
- Association finances
- Reserves
- Insurance
- Litigation
- Special assessments
- Rental concentration
- Major repairs
Financing eligibility can ultimately become a resale issue.
The Condo Questionnaire Is Not the Same as Your HOA Document Review
This distinction is important.
The lender reviews the condominium primarily to determine whether the project meets its lending requirements.
The buyer should review the condominium documents to determine whether ownership makes sense personally and financially.
Those are different objectives.
A lender may approve a project that still has rules you dislike.
For example, the association might:
- Restrict rentals
- Limit pets
- Regulate renovations
- Restrict parking
- Limit certain amenity uses
Lender approval should therefore never replace the buyer's own due diligence.
Related reading: How HOA Rules Can Affect Condo Buyers
Review the Condo Financial Statements Yourself
Likewise, the lender's review of association finances does not mean the buyer should ignore them.
The lender is evaluating risk according to mortgage guidelines.
You are evaluating whether you want to become one of the owners responsible for funding the association.
Review:
- Current budget
- Recent financial statements
- Reserve information
- Special assessments
- Association debt
- Delinquencies
- Major upcoming projects
Read our complete guide: How to Read Condo Financial Statements Before Buying.
What Happens If the Condo Does Not Meet Your Lender's Requirements?
The next step depends on the reason.
Possible outcomes might include:
- The lender requests additional documentation
- The association provides clarification
- The lender uses a different type of project review if available
- The buyer changes loan products
- The buyer approaches a portfolio lender
- The buyer increases the down payment if an alternative program requires it
- The financing cannot proceed
Do not assume the first lender saying no means the condominium can never be financed.
At the same time, do not assume another lender will automatically solve the problem.
The nature of the project issue matters.
Why a Condo-Savvy Lender Matters
If you are buying an Atlanta condominium, particularly an older high-rise, loft conversion, mixed-use project, or building with an unusual ownership structure, working with a lender experienced in condo financing can be valuable.
An experienced lender may know to investigate project eligibility early and understand what documentation will likely be required.
This can reduce the chance of discovering an avoidable financing issue immediately before closing.
Questions Buyers Should Ask Their Lender
- What type of condo project review will this loan require?
- When will you begin reviewing the condominium?
- Who orders the condo questionnaire?
- Has your company financed units in this building recently?
- Do you see any known project concerns?
- What happens if the project does not qualify for this loan program?
- Do you offer portfolio or alternative condo financing?
- Could an insurance issue delay approval?
- Could a special assessment affect underwriting?
- When do you expect project approval to be complete?
Questions Buyers Should Ask About the Building
In addition to the lender's questionnaire, buyers should investigate:
- How much money does the association have in reserves?
- Are there current or proposed special assessments?
- Are major capital projects planned?
- Is the association involved in litigation?
- Are many owners delinquent on HOA assessments?
- Are there known structural or water-intrusion concerns?
- Are rentals restricted?
- Are short-term rentals permitted?
- Has the building experienced recent insurance changes?
- Have recent buyers encountered financing problems?
A Better Way to Think About Condo Due Diligence
When purchasing a condominium, evaluate three separate layers:
1. The Unit
Condition, floor plan, view, renovations, HVAC, appliances, parking, storage, and inspection findings.
2. The Association
Finances, reserves, rules, insurance, maintenance, assessments, litigation, management, and upcoming projects.
3. The Financing
Whether both the borrower and the condominium project satisfy the requirements of the selected mortgage program.
A strong condo purchase requires all three pieces to work together.
Final Thoughts
A condo questionnaire may look like routine lender paperwork, but it can play an important role in determining whether a financed condominium purchase reaches closing.
The questionnaire helps the lender evaluate the project behind the individual unit, including factors involving finances, insurance, assessments, litigation, ownership, rentals, and property condition.
For buyers, the biggest lesson is simple: getting yourself approved for a mortgage does not necessarily mean every condominium will qualify for that mortgage.
That is why condo financing should be investigated early, particularly when purchasing in a high-rise, older building, mixed-use development, or condominium with known financial or insurance issues.
And even when the lender approves the project, buyers should still conduct their own review of the association's finances, governing documents, rules, reserves, and upcoming expenses.
If you're considering buying a condo in Midtown, Buckhead, or elsewhere in Intown Atlanta, contact The Agency Atlanta Intown. Our team can help you compare buildings, identify important condominium documents, coordinate with experienced lenders, and ask the right questions before your due-diligence period expires.
This article is provided for general informational purposes and is not legal, lending, accounting, insurance, or financial advice. Condominium project requirements vary by lender and loan program and can change. Buyers should confirm current requirements directly with their lender and appropriate professionals.
