The short answer to your question is that you should only be required to pay one fee to obtain the completed condominium project questionnaire to include in your mortgage application. You should either pay a fee to the management company used by the condo project homeowners association (HOA) or to a third party service selected by your lender if the condo HOA does not use a management company or cannot complete the questionnaire on its own. You should not pay two fees for the same information.
When you apply for a mortgage on a condo, the lender is required to review information about the condominium project to make sure that the project meets certain guidelines. Condo project guidelines address a range of items but focus on the following:
The percentage of units that are owner-occupied (must be at least 51% for a conventional mortgage and 50% for an FHA loan)
Unit ownership concentration (e.g., what percentage of units are owned by a single person or entity)
For a condo project to be approved by the FHA, a maximum of 50% of the units can have an FHA loan
Any pending litigation against the condo project
The HOA fee delinquency rate (no more than 15% of owners can be delinquent on their HOA fees)
The master condo project insurance policy
The HOA budget to ensure there are sufficient funds for ongoing or deferred maintenance or major projects
The lender reviews a condo project questionnaire that addresses all of the requirements outlined above as well as other pertinent information. If the condominium project meets the required guidelines, it is classified as warrantable, which makes it easier to get approved for your mortgage.
Review How to Get a Mortgage on a Condo
If the condo project does not meet the guidelines, you need a non-warrantable condo mortgage, which is more challenging to qualify for. Additionally, fewer lenders offer mortgages on non-warrantable condo projects plus you are usually required to pay a higher mortgage rate and closing costs.
Because the condo project questionnaire requires extensive information that is subject to change as units in the project are bought and sold, many projects hire an HOA management company to maintain the information and to perform other services. Larger condo projects with more complicated finances are more likely to retain an HOA management company.
If you want to buy a unit in the project, the HOA management company fills out the condo project questionnaire required by the lender, for a fee. The fee varies depending on the size of the project and other factors but usually ranges between $50 and $100.
Some condo projects, however, do not work with an HOA management company and may not have the resources to complete the questionnaire in a timely manner. In this case, your lender may hire a third party to collect the information necessary to fill out the questionnaire, again, for a modest fee.
Whether the completed condo project questionnaire is provided by an HOA management company or a company hired by your lender, the information should be the same. Your lender only needs one questionnaire which means you should only pay one fee to obtain it.
If your lender attempts to charge you multiple fees, ask for an explanation because it is usually a simple misunderstanding. In most cases, the lender should remove the extra fee from your closing costs. If your lender refuses to remove the fee and cannot provide a satisfactory explanation as to why you are being charged twice, then consider working with a different lender.
Condo mortgages are provided by lenders including banks, mortgage brokers and credit unions. We recommend that you contact multiple lenders in the table below to find the best condo mortgage terms.
"Condo, Co-Op, and PUD Eligibility." Originating & Underwriting. Fannie Mae, 2019. Web.