The project gets reviewed too
Depending on the loan type and transaction, underwriting may review the condominium project for items such as insurance, litigation, budget and reserves, ownership concentration, commercial space, delinquent assessments, structural issues, and other project characteristics.
HOA documents matter
Lenders may require a condominium questionnaire, budget, master insurance information, governing documents, or other association materials. The exact review can depend on the loan type, occupancy, loan-to-value, and whether the project qualifies for a limited or full review.
Insurance has become especially important
Master insurance coverage, deductibles, and other project-insurance details can affect eligibility. Identifying those issues early is much better than discovering them close to closing.
What I watch for
- Conventional versus FHA project requirements
- HOA certification and review
- Master insurance
- Reserves and budget
- Litigation or special assessments
- Owner occupancy and investor concentration when relevant
Common Questions
If I qualify, does that mean the condo automatically qualifies too?
No. Condo financing can require a separate review of the project or HOA. A strong borrower can still run into financing issues if the project does not meet the applicable program requirements.
What HOA issues can affect financing?
Depending on the program, the review may involve master insurance, litigation, special assessments, reserves, budget, delinquent dues, ownership concentration, commercial space, structural concerns, and other project characteristics.
Should the condo review start early?
Yes. When possible, identifying project or insurance issues early gives everyone more time to determine whether the project fits the intended loan or whether another financing path is needed.