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Financing a Condo

Financing a Condo

Down Payment Requirements to Finance a Condo

The condo association or elected board in some buildings may require larger down payments when financing a condo to hedge against default. They usually require larger equity positions in purchases to protect the communal assets.  The reasoning is that if a buyer has a substantial amount of equity in the unit, they are less likely to default on their mortgage.  Defaults lead to missed payments of association dues which causes financial burdens on the rest of the unitholders and jeopardizes the building’s budget. 

The Condo Questionnaire

When financing a condo, lenders will require a condo questionnaire to evaluate the budget and any legal action against the association. Government-backed loans like FHA and VA may require budgeted reserves and planned contributions to mitigate their risk. If you plan on purchasing a condo with a government-backed loan, ask your lender for a list of buildings that are already FHA VA approved.  As of August 2019, lenders can perform single-unit approvals which allow you to purchase in a building that has not been FHA /VA approved.  Be sure that you have a full understanding of the single unit approval process before committing. This is not an easy task and could require additional time and effort to get to the closing table.

FannieMae’s Condo Questionnaires:

  • Condominium Project Questionnaire—Full Form (Form 1076) contains a list of eligibility questions to support a Full Review, and
  • Condominium Project Questionnaire—Short Form (Form 1077) contains a shorter list of questions to facilitate a Limited Review.


FreddyMac’s Condo General Project Eligibility Requirements:


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