CHICAGO CONDO FINANCING GUIDE Buying a condo in Chicago is different from buying a single-family home. The lender reviews your income, credit, and down payment. The lender also reviews the condo building and homeowners association. You can be a well-qualified buyer and still run into a financing problem if the building does not meet the loan program’s requirements.
WHY DOES THE BUILDING MATTER? When you buy a condo, you own your individual unit and share responsibility for the building with the other owners. The lender reviews items such as: The HOA budget and reserve funds The building’s master insurance policy Special assessments Pending lawsuits Major repairs or deferred maintenance The number of units rented Owners who are behind on HOA dues Commercial space in the building
CHICAGO HAS MANY DIFFERENT TYPES OF CONDO BUILDINGS The questions change depending on the building. A small three-flat in Lakeview can be managed directly by the owners. A West Loop high-rise often has professional management, elevators, door staff, parking, and a large insurance policy. A vintage walk-up can have upcoming masonry, roof, plumbing, porch, or tuckpointing work. None of these building types is automatically a problem. Each one requires a different review.
The building itself affects whether conventional or FHA financing is available.
SMALL CONDO ASSOCIATIONS Chicago has many two, three, and four-unit condo associations. These buildings often have low monthly dues because the owners handle many responsibilities themselves. They can also have smaller reserve accounts, less formal paperwork, or no professional management company. Before buying, understand: How much money the association has saved Whether owners pay major expenses as they arise Whether large repairs are coming Whether the insurance meets lender requirements Whether the association maintains organized financial records Low HOA dues look attractive, but they can also lead to large special assessments when the roof, masonry, porch, or another shared part of the building needs work.
The information provided here is for informational purposes. When interest rates and loan program information are included, it is for illustration purposes only and not a solicitation or quote for services. This is not an advertisement or loan estimate. Current interest rates, loan programs and qualification criteria can change at any time. If you have questions or need assistance, we can be reached using the contact information above. Union Home Mortgage Corp. does not provide tax, legal, credit repair, or accounting services. The information provided is generally true but may not apply to you or your situation. For tax or legal advice please consult an appropriate professional in one of these fields.