Condo Questionnaire

Underwriters require a Condo Questionnaire to be completed by the HOA for all transactions.

 https://singlefamily.fanniemae.com/originating- underwriting/condo-co-op-and-pud-eligibility.

Key Review Areas

Below are the key areas an underwriter looks in approving a Condo HOA:

 HOA Reserves Set Aside For Future Maintenance Expenses: A reserve contribution of at least 10% on the budgeted income is needed for high LTV loans requiring “Full Review.”

 Delinquency Payments Of Homeowners: No more than 15% of the units can be delinquent on their dues for more than 60 days.

Approved Condos Lists

Some lenders may maintain a database of approved condos, which will allow for a faster approval for future loans. Also, Fannie Mae, FHA, and VA maintain a list of condos they have reviewed and approved.

 Fannie Mae list approved condos: https://singlefamily.fanniemae.com/project- eligibility-reviewservices

 FHA list of approved condos: https://entp.hud.gov/idapp/html/condlook.cfm

 VA’s list of approved Condo’s: https://lgy.va.gov/lgyhub/condo-report

 Insurance Coverage (Fidelity In Addition To General Liability): Fidelity coverage is required to be 25% or more of the budgeted income for projects with 21 or more attached units.

 Whether There Is Litigation Against The Hoa: Is there Litigation that impacts health, safety, habitability or structural issues.

 Ratio Of Renters Occupying The Units To Owner Occupants: This applies if the loan is for an investor.

 Commercial Space Square Footage Percentage: No more than 35% is allowed.

 Single Entity Ownership: In a project of 5-20 units, no more than two owned units per owner are allowed; for projects of 21 or more units, no more than 20% is allowed (up to 49% case by case).

Underwriter Approval Reviews

Condo HOA reviews fall under two formats: Limited Review and Full Review. The decision on which applies to an 

Limited Reviews

For a Limited review, the questionnaire and insurance are needed, but the budget,  liability insurance are not needed nor reviewed.

 a Limited Review:  Projects already approved by Fannie Mae: https://singlefamily.fanniemae.com/project- eligibility-review-services

 Owner Occupied transactions where the LTV (Loan to Value) is 90% or less. (75% in FL)

 Second Home transactions where the LTV is 75% or less. (70% in FL)

 Investment transactions where the LTV is 75% or less. (70% in FL)

Full Reviews

For a Full review, the questionnaire, budget, and master insurance policy are fully reviewed.

Full Condo HOA review: In general, these are the most common reasons for not obtaining condo approval when a Full Review is required is referenced above:  Litigation.  Single Entity Ownership percentage.  Non-Residential Commercial space exceeding 35%.

 Inadequate Reserves.  Excessive delinquent HOA dues

Condo Characteristics here:  https://singlefamily.fanniemae.com/ media/5516/display