Have you heard of the condo project questionnaire? If you are buying a two-bedroom in Lakeview, a vintage unit in Logan Square, or a studio in a Loop high-rise, that form is the document most likely to end your financing a week before closing.
The questionnaire is a multi-page form your lender sends to the association or its management company, and every question on it is about the building rather than about you. Your credit, your income, and your reserves can all be immaculate while the project quietly fails a threshold you never knew existed.
Cook County makes this harder than most markets. Chicago's condo stock skews old, small, and self-managed, and Illinois layers its own resale-disclosure statute on top of the agency rules — so a Chicago condo file carries two parallel document sets that have to agree with each other.
The condo questionnaire is a lender form the association completes about the building: reserves, delinquency, ownership concentration, litigation, and assessments. The building has to pass on its own before your loan can close.
What The Underwriter Is Actually Reading
Fannie Mae's condo project standards sit in the Selling Guide at B4-2.1 (general project eligibility), B4-2.2 (project eligibility review requirements), and B4-2.3 (specific project types). Freddie Mac runs a close parallel in Guide Chapter 5701, so a project that fails one of them usually fails both.
Underwriters do not read the questionnaire top to bottom. They read for the handful of answers that make a project ineligible, and those answers include but are not limited to:
- Replacement reserves. Under a Full Review, the annual budget has to allocate at least 10% to replacement reserves and deferred maintenance, or a current reserve study has to support a lower figure. Plenty of small Chicago associations budget three to five percent and cover the gap with special assessments, which is exactly the pattern the rule exists to catch.
- Delinquency rate. No more than 15% of the total units may be 60 days or more past due on their regular assessments. In a twelve-unit Ravenswood building, two delinquent owners put the project over the line.
- Single-entity ownership. One entity may own no more than 20% of the units in a project of 21 or more units, no more than two units in a project of five to twenty units, and one unit in a two-to-four-unit project. Chicago's deconversion market has quietly pushed dozens of courtyard buildings past this cap.
- Owner-occupancy ratio. At least 50% owner-occupancy is required when the purchase is a second home or an investment property in an established project. That test is not applied to a primary-residence purchase, which is why the same building can finance for one buyer and not the next.
- Commercial space. Non-residential square footage is capped at 35% of the project's total. A six-flat sitting over a restaurant, or a mixed-use corner building on Milwaukee Avenue, can fail on floor area alone.
- Litigation. Pending litigation involving safety, structural soundness, habitability, or the functional use of the project makes it ineligible, while minor matters — small-money disputes, fully insured claims, an association suing a delinquent owner — fall under stated exceptions. Construction-defect suits against a developer are the common disqualifier in newer Chicago conversions.
- Critical repairs and deferred maintenance. Under the condo project requirements the agencies introduced in 2021 and later folded into the guides, a project with unaddressed critical repairs is ineligible no matter how strong the borrower looks. A facade report with an unsafe finding, an open building-code violation, or a structural engineer's letter all land here.
- Special assessments. The lender has to document the amount, the reason, the remaining term, and whether the assessment is fully funded. This is the line where the borrower's file and the project's file collide.
All of these live on one form, and the association fills it out — frequently a volunteer treasurer working from memory. Note that an inaccurate questionnaire is still an underwriting fact until the association corrects it in writing.
Agency standards cap assessment delinquency at 15% of units 60 or more days past due, and a Full Review budget must fund replacement reserves at 10% or more. Both are project-level tests, not borrower tests.
The Insurance Line Most Buyers Skip
Agency standards cap the master policy deductible at 5% of the face amount of the policy, and the association's budget has to show it can fund that deductible. Where the master policy is written bare-walls, you also need an HO-6 walls-in policy with enough coverage to restore the unit's interior.
Chicago high-rises carrying large wind or water deductibles are the usual failure point, and the fix — a board resolution funding the deductible, or a policy endorsement — takes weeks. Ask for the insurance certificate at the same time you ask for the budget.
How A Special Assessment Lands In Your DTI
A levied special assessment paid in installments counts as a monthly recurring debt in your DTI. Paid in full at or before closing and documented with an association payoff letter, it drops out of the ratio entirely.
Fannie Mae's automated underwriting will approve to a 50% debt-to-income ratio, and manual underwriting generally stops at 45%. Those ceilings are hard edges rather than guidelines, which is why an assessment installment that looks small next to a mortgage payment can be the number that fails the file.
Keep in mind that the reason behind the assessment matters as much as the dollar amount. An assessment funding a lobby refresh is a DTI problem, while an assessment funding a structural repair the engineer flagged is a project-eligibility problem — and the second one cannot be solved by paying it off.
Worked Example: A Lakeview Two-Bedroom With A $12,000 Assessment
Consider an illustrative file, using hypothetical figures rather than a quote. A buyer earns $10,000 a month gross, and the Lakeview unit carries $3,650 in projected principal, interest, taxes, insurance, and the regular monthly assessment.
The buyer's other obligations total $900 a month: a $480 car payment, $310 in student loans, and $110 in card minimums. The board has levied a $12,000 special assessment for masonry and lintel work, payable over 24 months at $500 a month.
| Scenario | Housing | Other debts | Assessment | DTI | Result |
|---|---|---|---|---|---|
| Before the assessment | $3,650 | $900 | $0 | 45.5% | Approvable |
| Assessment counted at $500 a month | $3,650 | $900 | $500 | 50.5% | Over the 50% ceiling |
| Structure A — paid in full at closing | $3,650 | $900 | $0 | 45.5% | Approvable |
| Structure B — car note retired first | $3,650 | $420 | $500 | 45.7% | Approvable |
| Board lever — re-amortized over 48 months | $3,650 | $900 | $250 | 48.0% | Approvable, no cushion |
Structure A is the cleanest of the two: negotiate a seller credit or a price reduction sized to the $12,000 payoff, then have the assessment satisfied at or before closing with an association payoff statement in the file. The obligation leaves the ratio because it no longer exists.
Structure B leaves the assessment in place and removes an unrelated debt instead. Retiring and closing the $480 auto loan before the file goes to underwriting drops the ratio to 45.7%, though it consumes cash the borrower may need for reserves — so the two structures trade DTI against liquidity.
A third lever depends entirely on the board rather than on the buyer. Some Chicago associations will re-amortize a levied assessment over 36 or 48 months on request, and a board resolution documenting the longer term satisfies most underwriters.
All of this assumes the masonry work is ordinary maintenance. If the engineer's report calls the wall unsafe, the project is ineligible on its own terms and no DTI structure rescues it.
Limited Review Versus Full Review
Limited Review skips the budget, reserve, and delinquency analysis, but caps LTV at 90% for a primary residence and 75% for a second home. Full Review examines the whole project and is required for investment purchases.
Not every condo file gets the same depth of project review, and the level applied decides which of the thresholds above actually get tested. A Limited Review means a shorter questionnaire and a shorter list of failure modes.
| Review element | Limited Review | Full Review | Portfolio / non-QM |
|---|---|---|---|
| Who qualifies | Primary residence to 90% LTV; second home to 75% | Any occupancy, including investment | Projects that fail agency standards |
| Budget and reserves | Not reviewed | 10% reserve allocation or a supporting reserve study | Lender's own policy |
| Delinquency test | Not applied | 15% of units at 60-plus days | Lender's own policy |
| Special assessment | Still disclosed and still counted in DTI | Amount, reason, and funding documented | Often allowed with an escrow holdback |
| Typical Chicago outcome | Fastest path for a 20%-down primary buyer | Where vintage buildings fail | Deconversion-heavy or litigation-bound buildings |
Notice the asymmetry. A 20%-down primary-residence buyer can often clear a building that would fail a Full Review, while a second-home buyer at the same price in the same building cannot — which is how a listing agent can truthfully tell you the building financed last year for a loan you are unable to replicate.
The Illinois 22.1 Package And Why It Matters More Than The Questionnaire
Section 22.1 of the Illinois Condominium Property Act requires the association to furnish a selling owner the budget, reserve balance, pending litigation, insurance, and capital expenditures planned for the next two fiscal years.
Illinois codifies condo resale disclosure at 765 ILCS 605/22.1. On the written request of a unit owner who is selling, the association must make available the declaration, bylaws, and rules; a statement of account and any liens against the unit; the most recent financial statement; a statement of the reserve and replacement fund balance, including any portion earmarked for a specified project; a statement of pending suits or judgments; a statement of insurance coverage; and a statement of capital expenditures anticipated in the current or the two succeeding fiscal years.
The association generally has 30 days from the written request to produce the package, and it may charge a reasonable fee. Request it the day the contract is signed, because 30 days is most of a Chicago closing timeline.
The anticipated-capital-expenditures line is the one underwriters have learned to read closely. An assessment that has not been voted on yet still appears there as a planned expenditure, and a lender who sees a roof replacement anticipated in the next fiscal year will ask the board whether a levy is coming.
Board minutes are the companion document. Twelve to twenty-four months of minutes will show you the engineering report, the vote that failed, and the owner group organizing a deconversion long before any of it reaches a questionnaire — and Section 15 of the Act sets a supermajority of 85% of the ownership interest to approve a sale of the entire property, so that organizing is visible well in advance.
When The Two Document Sets Disagree
The questionnaire and the 22.1 package come from the same association for two different audiences, and they do not always match. A treasurer may answer "no special assessment" on the lender's form while the 22.1 statement discloses an anticipated capital expenditure for the very same project.
Underwriters resolve that conflict against the borrower. The cure is documentation: a board resolution, a payoff statement, or a management-company letter stating the amount, the levy date, the term, and the current balance.
Ask for that letter early, because Chicago management companies typically charge for it and turn it around on their own schedule. A single letter can be the difference between a project condition cleared and a closing pushed two weeks.
Chicago-Specific Reasons Assessments Get Levied
Special assessments in Cook County cluster around a short list of building systems, and most of them are age-driven rather than accident-driven. Common triggers include but are not limited to:
- Facade and exterior wall work. Chicago's exterior-wall inspection ordinance puts taller buildings on a recurring inspection cycle, and a report flagging unsafe conditions converts into a critical repair and an assessment in the same season.
- Porches and rear stairs. The city tightened porch construction standards after the 2003 Lincoln Park collapse, and the wood rear porches on three-flats and six-flats reach the end of their service life on a predictable cycle.
- Masonry, lintels, and tuckpointing. Century-old common brick in Logan Square, Pilsen, and Bridgeport moves with Chicago freeze-thaw cycles, and lintel replacement is rarely a small line item.
- Garage and plaza decks. Mid-century lakefront high-rises carry post-tensioned or membrane decks that fail expensively and all at once.
- Risers and waste stacks. Vintage galvanized supply lines and cast-iron stacks get replaced building-wide rather than unit by unit.
- Elevator modernization. Code-driven elevator upgrades in older mid-rises frequently arrive as a levied assessment instead of a reserve draw.
Each of these has the same underwriting shape: an engineer's report, a board vote, a levied assessment, and a questionnaire answer that changes mid-transaction. Be aware that the questionnaire is a point-in-time snapshot, and lenders re-verify it when a closing slips past its validity window.
When The Project Is Non-Warrantable
A non-warrantable condo can still be financed through a portfolio or non-QM lender that keeps the loan on its own books. Expect a lower maximum LTV, larger reserve requirements, and pricing above agency levels.
When a project fails an agency threshold, the loan moves to a lender that is not selling it to Fannie Mae or Freddie Mac. Portfolio banks, credit unions with local condo exposure, and non-QM programs all write this paper, and Chicago has a deep bench of them because the market produces so much of it.
What changes is the shape of the deal. Down payment requirements commonly rise, reserve requirements stretch, and the rate is quoted above comparable agency pricing — the size of that spread varies by lender and by month, so get it on a rate sheet rather than in conversation.
The desks that run condo portfolio programs often run documentation-flexible products as well, so a self-employed buyer weighing bank statement loans is frequently already talking to the right lender. Ask whether the condo exception and the income documentation program can be used on the same file.
Two agency alternatives are worth checking before you concede the point. FHA maintains its own approved-condo list plus a single-unit approval path that permits a limited share of units in an unapproved project — capped at 10% of units in projects of more than ten units — and VA maintains a separate approved-condo list with its own review process.
Remember that non-warrantable status attaches to the building and stays there. The buyer you sell to in six years faces the same narrowed lender pool, and that shows up in your exit price — the same dynamic we walk through in our guide to Florida condo financing.
What To Do Before You Write The Offer
The sequence matters more than the paperwork. Here is the order that keeps a Chicago condo file from failing late:
- Ask the listing agent two questions in writing. Is there a levied or pending special assessment, and has the building financed conventionally in the past twelve months? Get the answers by email rather than by phone.
- Request the 22.1 package the day the contract is signed. The association's response window can consume most of the runway between attorney review and closing.
- Have your lender order the questionnaire before the appraisal. A project denial that arrives after an appraisal fee is a fee you did not need to spend.
- Read the reserve balance against the budget. A budget funding well under 10% in reserves with no reserve study behind it is a strong signal of an assessment ahead.
- Pull twelve to twenty-four months of board minutes. Engineering reports, failed votes, and deconversion organizing appear in minutes long before they appear on any form.
- Price the tax escrow separately. Cook County reassesses Chicago on a three-year cycle, and a reassessment year can move your escrow independently of anything the association does.
All of this adds up to one posture: treat the building as a second borrower with its own credit file. Illinois attorney review gives you a structured window to do exactly that, which is an advantage Chicago buyers hold over buyers in states without it.
Where This Fits In A Chicago Purchase
A condo questionnaire problem rarely arrives alone. It tends to show up alongside the other Chicago-specific line items — the city and county levies covered in our breakdown of the Chicago transfer tax for buyers, and the escrow math in our guide to Illinois property taxes.
If you are earlier in the process, our Illinois mortgage guide covers loan programs and closing mechanics statewide, and buyers still assembling a down payment may want to review IHDA down payment assistance before narrowing to a single building.
Have you found a unit you like in a building you have not vetted yet? Ask your lender to run the project review first, and ask the seller for the 22.1 package and two years of minutes before you spend anything on inspection or appraisal.
This article is for informational purposes and is not financial, mortgage, or contractor advice. Consult a licensed professional in your jurisdiction.