Fannie Mae Condo Questionnaire: Every Threshold MLOs Must Know

Fannie Mae requires a condo project questionnaire on all established condo projects not eligible for limited review. Understanding the precise thresholds before you order the questionnaire saves time and protects your pipeline from late-stage declines.

Owner-Occupancy and Investor Concentration

At least 50% of the total units in the project must be owner-occupied or second homes at the time of loan delivery. For projects with 21 or more units, no single entity may own more than 10% of the units. For projects with 5 to 20 units, the single-entity cap is 20%. Investment condo purchases require full review regardless of LTV.

HOA Dues Delinquency

No more than 15% of the total units may be 60 or more days delinquent on HOA dues. This is a unit-count calculation, not a dollar-amount calculation. A 100-unit project with 16 delinquent owners fails the test regardless of how small the individual monthly assessments are.

Reserve Funding and Special Assessments

• ✦The project operating budget must allocate at least 10% of total assessments to a funded reserve account
• ✦Any pending special assessment must be disclosed on the questionnaire with the amount, purpose, and repayment schedule
• ✦Special assessments for deferred maintenance carry more weight than those for capital improvements or upgrades
• ✦Active litigation involving the HOA for structural defects, habitability, or safety is typically disqualifying for Fannie Mae

Commercial Space Limit

Non-residential space in a non-resort condo project cannot exceed 35% of the total building square footage. Mixed-use buildings with ground-floor retail frequently trip this rule. Pull total square footage from the recorded condo declaration rather than from the questionnaire alone, as HOA administrators sometimes undercount.

Limited Review Eligibility

Limited review is available for owner-occupied principal residences at LTV at or below 90% and for second homes at LTV at or below 75%. Investment properties always require full review. New condo projects also require a different review path under Fannie Mae's project eligibility matrix.