What is a condo lender questionnaire?
By Dommek · Updated
A condo lender questionnaire (also called a condo questionnaire or condominium project questionnaire) is a form a mortgage lender sends to the condominium association or its management company. It asks about the association's finances, insurance, owner occupancy, litigation and more, so the lender can decide whether the building is eligible for financing.
Video: Automate the generation of a condo lender questionnaire
What does a lender questionnaire ask?
Lenders want to know whether the building as a whole is a safe loan, not just the unit. Questions vary by lender and loan type, but most cover the same ground.
- Number of units, how many are owner-occupied, rented or owned by the developer
- How many owners are behind on assessments, and by how much
- Budget, reserve funds and any special assessments planned or in place
- Master insurance coverage, including property, liability and flood where relevant
- Pending or threatened lawsuits involving the association
- Commercial space, and whether any one owner holds a large share of the units
- Needed repairs, inspections or structural work the association has identified
Who requests it, and who fills it out?
The buyer's lender or its processor sends the questionnaire, usually soon after the loan application. The association's manager or board completes it from the association's own records, then returns it to the lender. Cash purchases normally do not need one.
Why it can slow down a closing
The answers come from several places: the budget, the reserve study, the insurance policies, the owner ledger and the litigation file. Gathering them by hand for every request is slow, and an incomplete or inconsistent form is often sent back by the lender. Because the buyer cannot close until the lender signs off on the building, a late questionnaire is a common source of closing delays.
Questionnaire vs. estoppel letter
A lender questionnaire describes the health of the whole association for the lender. An estoppel letter states what one unit owner owes the association, for the closing agent. A condo sale with a mortgage often needs both. See our guide to HOA estoppel letters for the details.
How management companies speed it up
Associations that keep their financial, insurance and ownership data in one place can fill in most of the form from records they already have. Dommek automates the generation of condo lender questionnaires, so the manager reviews a completed draft instead of starting from a blank form.