The Condo Questionnaire, Explained

# The Condo Questionnaire, Explained

When you buy a condo in Massachusetts, you're not just buying a unit — you're buying into a shared financial and legal entity. The condo questionnaire is how your lender investigates that entity before agreeing to fund your loan. It's one of the most overlooked documents in a condo transaction, and it can quietly kill a deal or save you from a bad one.

Here's what it is, who fills it out, and what its answers actually tell you.

What the Questionnaire Is

The condo questionnaire is a form your lender sends to the condominium association (or its management company) during underwriting. It asks pointed questions about the building's finances, insurance, legal status, and occupancy. The association fills it out, often charging a fee ($100–$350 is common in Massachusetts), and returns it to the lender.

Fannie Mae and Freddie Mac both have standardized versions. Lenders use the answers to decide whether the condo is "warrantable" — meaning it meets the guidelines that let the loan be sold on the secondary market. A non-warrantable condo doesn't mean you can't buy it; it means financing gets harder and more expensive.

There are two versions: a full questionnaire for detailed review and a limited questionnaire used for lower-risk loans, typically when the buyer is putting more money down.

The Financial Questions

This is the heart of the form. Lenders want to know the association can pay its bills and handle emergencies.

• Reserve funding. Fannie Mae generally wants at least 10% of the annual budget going into reserves. A thin reserve means owners will get hit with special assessments when the roof or boiler fails.
• Delinquencies. The form asks what percentage of owners are behind on dues. If more than 15% are delinquent (Fannie Mae's threshold), the loan can be rejected. High delinquency signals a struggling association.
• Special assessments. Current or planned assessments get flagged. A pending assessment can affect your monthly cost and the lender's willingness to lend.
• Budget and dues. Underwriters compare the operating budget against the number of units to see if the fees are realistic.

The Ownership and Occupancy Questions

• Owner-occupancy ratio. Investor-heavy buildings are riskier to lenders. For a primary residence, this matters less, but for an investment purchase, some loans require a minimum owner-occupancy percentage.
• Single-entity ownership. If one person or company owns too many units (generally more than 10% in larger buildings, or two-plus units in small ones), the building may be non-warrantable.
• Commercial space. Too much retail or commercial square footage in a mixed-use building can trip warrantability rules — relevant in a lot of Boston, Cambridge, and Somerville conversions.

The Legal and Insurance Questions

• Litigation. The form asks whether the association is involved in any lawsuits. Litigation over construction defects or structural issues is a red flag that can stop a loan cold.
• Master insurance. Lenders confirm the association carries adequate hazard, liability, and — where applicable — flood coverage. After the Surfside collapse in Florida, scrutiny of structural integrity and insurance has tightened nationally.
• Control transfer. In new construction, the form asks whether the developer still controls the association or whether it has been turned over to owners.

Why It Matters to Buyers and Sellers

For buyers, the questionnaire is free intelligence. If the association reports low reserves, high delinquencies, or active litigation, you're learning something the seller may not volunteer. I always tell my clients to read the completed questionnaire alongside the master deed, budget, and recent meeting minutes.

For sellers, a problematic questionnaire can shrink your buyer pool to cash buyers only. If your association is non-warrantable, knowing that early lets you price accordingly or address the issues before listing.

Small self-managed associations — common in two- and three-unit conversions across Greater Boston — often struggle to complete these forms accurately or quickly. That delay can jeopardize your closing date. As part of navigating this, I help both buyers and sellers at Signal Real Estate anticipate questionnaire problems before they derail a deal.

The Bottom Line

The condo questionnaire isn't paperwork — it's a financial health report on the community you're joining. Read it carefully, ask questions about anything that looks off, and get ahead of it early. A weak questionnaire can end a deal, but understanding it can also protect you from buying into a poorly run association.