Chicago Condo Loans: The Complete 2026 Guide

Last reviewed: November 6, 2026 · Chicago Condo Loans Editorial Team · How we research

Quick answer A condo loan in Chicago approves two things: you and the building. You qualify on credit, income, and down payment the same way you would for a house. The lender also reviews the condominium association: its budget and reserves, insurance, unpaid dues, lawsuits, needed repairs, and how the building is owned and used. If the building doesn’t meet the loan program’s rules, your options narrow, even when your own finances are strong. In 2026 that building review got stricter: for conventional loans, Fannie Mae and Freddie Mac ended their “limited” and “streamlined” reviews on August 3, 2026, so most established buildings now need a full review.

Key takeaways

The building matters as much as the buyer. Lenders review the condo association before they approve a condo loan.
Big 2026 change: for conventional loans with applications dated on or after August 3, 2026, established condo buildings generally need a full project review. The lighter limited or streamlined review is gone, except that buildings with 10 or fewer units may qualify for a waiver (see financing small condo buildings).
Reserve rules are rising. Fannie Mae requires at least 10% of the budget to go to reserves today, rising to 15% for full reviews starting January 4, 2027.
2026 loan limits for Cook County: $832,750 for a conventional conforming loan and $541,287 for an FHA loan on a one-unit property (FHFA, announced November 25, 2025; HUD Mortgagee Letter 2025-23, December 11, 2025, for FHA case numbers assigned on or after January 1, 2026).
FHA and VA loans require the building (or, for FHA, sometimes the individual unit) to be approved for that program. An FHA approval does not make a building VA-approved; VA reviews the project separately.
In Illinois, the association must give buyers key documents under Section 22.1 of the Condominium Property Act within 10 business days of a written request. Read them before you commit.

How is a condo loan different from a house loan?

With a single-family house, the lender mainly evaluates you and the property’s appraised value. With a condo, you are buying a unit plus a shared interest in a building run by an association. The association’s finances directly affect the value and safety of the lender’s collateral, so lenders look at the whole building.

That creates three practical differences for Chicago buyers:

An extra approval step. The lender reviews the project (the building and association), usually using a condo questionnaire the association or its management company fills out.
More paperwork and time. The questionnaire, budget, reserve information, and insurance certificates all have to be gathered, often with fees charged by the management company.
Pricing differences. Conventional condo loans can carry an extra pricing adjustment. Fannie Mae’s current pricing matrix includes a condo-specific adjustment that increases at higher loan-to-value ratios. You usually see it as a slightly higher rate or cost, not a separate line item.

What lenders check about a condo building

Each loan program has its own rules, but lenders reviewing a Chicago condo building typically look at:

Budget and reserves. Whether the association sets aside enough money each year for future repairs. Fannie Mae now requires the budget to use the highest reserve contribution recommended in the building’s reserve study, if it has one, and no longer accepts a “baseline” approach that lets reserves run near zero.
Delinquent dues. The share of owners who are 60 or more days behind on assessments. Fannie Mae allows no more than 15% of units to be 60 or more days past due (Selling Guide B4-2.2-01); FHA also limits delinquencies, and the lender checks the count on HUD’s condo questionnaire.
Litigation. Lawsuits involving the association, especially over construction defects or safety, can make a building ineligible.
Critical repairs and safety. Unfunded structural or safety repairs can make a building ineligible for conventional financing until they are fixed.
Insurance. The master policy, liability coverage, and fidelity coverage must meet program minimums.
Ownership concentration. Whether one person or entity owns too many units. For Fannie Mae, the limit is 2 units in projects of 11 to 20 units and 20% in projects of 21 or more (Selling Guide B4-2.1-03); FHA sets its own single-owner limit, which the lender checks on HUD’s condo questionnaire.
Commercial space. Buildings with a large share of retail or office space face limits. Fannie Mae (Selling Guide B4-2.1-03) and FHA (HUD News Release 19-121, August 14, 2019) both cap commercial or nonresidential space at 35% of the building’s floor area.
Hotel-like operations. Buildings run like hotels, with rental desks, short-term rental pools, or mandatory rental arrangements, are generally ineligible for conventional agency financing.

One rule was relaxed in 2026. Fannie Mae retired its owner-occupancy test for investment-property loans in established projects (Lender Letter LL-2026-03, March 18, 2026; Fannie Mae project standards FAQ), so a building with many renters is no longer disqualified for that reason alone when you buy an investment unit. New projects still have to meet presale requirements. Fannie Mae also has new rules for counting short-term rental income on an investment condo, required for applications on or after December 1, 2026 (Fannie Mae SEL-2026-08). If you’re buying a unit to rent out or use part-time, see our guide to investment and second-home condo loans.

Warrantable vs. non-warrantable condos

A warrantable condo is in a building that meets Fannie Mae and/or Freddie Mac project standards, so the loan can be sold to those agencies. A non-warrantable condo is in a building that doesn’t, perhaps because of litigation, low reserves, too many delinquent owners, a single investor owning too many units, too much commercial space, or needed repairs.

A non-warrantable condo can still be financed, but usually through a portfolio or non-QM loan held by the lender. Those loans often require larger down payments and carry higher rates than conventional loans, and terms vary widely by lender. Ask early whether a building is warrantable. Your lender can often tell you before you make an offer. For the full list of issues and your financing options, see warrantable vs. non-warrantable condos in Chicago.

The 2026 rule change: full review for most buildings

Fannie Mae announced the change in Lender Letter LL-2026-03, and Freddie Mac made matching changes in Bulletin 2026-C. (For what it means for a purchase already in progress, see our explainer on the end of Limited Review.) The main points:

Change	What it means	Effective
Limited Review (Fannie Mae) and Streamlined Review (Freddie Mac) retired	Established buildings generally need a full project review for conventional loans	Applications dated on or after August 3, 2026
Waiver of project review expanded	Buildings with 10 or fewer units may skip project review if they aren’t part of a master association and meet basic insurance and safety conditions	Immediately (March 2026)
Reserve budget rules tightened	Budget must include the highest recommended reserve contribution; the “baseline” funding method is no longer allowed	August 3, 2026
Minimum reserves raised	From 10% to 15% of annual budgeted assessment income (full review)	January 4, 2027
Investor concentration limit removed	Fannie Mae no longer applies its owner-occupancy test to investment-property loans in established projects; new projects keep presale rules	Immediately (March 2026)

Sources: Fannie Mae LL-2026-03; Freddie Mac Bulletin 2026-C.

What this means in Chicago: many Chicago buildings, especially older high-rises and mid-size vintage buildings, used to qualify for conventional loans through the lighter review. Now more of them go through a full review, which looks harder at reserves, repairs, and finances. Buildings with thin reserves may need to raise assessments or fund a reserve study to stay warrantable, particularly ahead of the 15% reserve minimum in January 2027. Small buildings of 10 or fewer units, such as many two-flat, three-flat, and six-flat conversions, can benefit from the expanded waiver. Newly built and newly converted buildings face extra presale and completion rules, covered in our guide to new construction condo loans. Owners who refinance usually go through a building review again; see our condo refinance guide for when it’s waived.

Your loan options for a Chicago condo

Loan type	Typical minimum down payment	Building requirement	2026 Cook County limit (1 unit)
Conventional (Fannie Mae / Freddie Mac)	3%–5% for a primary residence, depending on program and borrower	Warrantable building (full review, or waiver for 10 or fewer units)	$832,750
FHA	3.5% with a credit score of 580 or higher	FHA-approved project, or FHA single-unit approval	$541,287
VA (eligible veterans and service members)	0% in many cases	VA-approved condo project	No limit for borrowers with full entitlement
Jumbo	Often 10%–20% or more; set by each lender	Set by each lender	Above $832,750
Portfolio / non-QM (non-warrantable)	Often 20%–25% or more; set by each lender	Can finance buildings agencies won’t	Set by each lender

Down payment figures are typical minimums; your lender’s requirements may be higher.

With a conventional loan and less than 20% down, you’ll usually pay private mortgage insurance (PMI), which can be removed later as you build equity. FHA loans carry their own mortgage insurance premiums, which work differently. Our guide to condo down payments and PMI compares the two. Buying a co-op rather than a condo? Most of these options work differently or not at all; see co-op loans in Chicago. Whatever the loan type, the lender bases your loan-to-value ratio on the lower of the price or the appraised value; our guide to condo appraisals explains what to do if the unit appraises low.

FHA condo loans in Chicago

FHA loans are popular with first-time buyers, but the condo building must be approved (our first-time condo buyer checklist compares FHA with 3%-down conventional options; if you’re buying a townhome, first check whether it is legally a condo or a PUD with our condo vs. townhome guide, and note that an FHA approval doesn’t make a building VA-approved). There are two routes:

FHA project approval. The whole building is on HUD’s list of approved condominiums. Approval must be renewed, roughly every three years, so a building can drop off the list if the association lets it lapse. You can search the HUD FHA-approved condominium list by name, city, or ZIP code.
Single-unit approval. If the building isn’t approved, a lender may be able to approve just your unit. In buildings with 10 or more units, no more than 10% of the units can have FHA loans through single-unit approval; in smaller buildings, the cap is two units (HUD News Release 19-121). The building still has to meet requirements such as at least 50% owner occupancy (HUD sets 30% for new construction and gut rehabs and 75% for two- to four-unit projects; HUD FHA knowledge base, KA-02392).

FHA and VA approvals are separate. A building on the FHA list isn’t automatically VA-approved, and the reverse is also true. For a step-by-step walkthrough, see FHA condo approval in Chicago.

Chicago and Illinois rules every condo buyer should know

Section 22.1 disclosures

Under Section 22.1 of the Illinois Condominium Property Act, when a unit owner sells, the association must provide key information within 10 business days of a written request (if you’re the seller, see how your buyer’s loan affects the sale). That includes the declaration, bylaws, and rules; any unpaid assessments on the unit; expected capital expenditures for the current and next two fiscal years; the reserve fund’s status; the most recent year’s financial statement; pending lawsuits; and insurance coverage. The fee is capped at $375, adjusted yearly for inflation, with up to $100 more for delivery within 72 hours. It’s one of several condo-specific charges at closing; our guide to condo closing costs covers the rest, including Chicago’s transfer taxes.

These documents overlap heavily with what your lender needs. Read them closely for low reserves, planned special assessments, and lawsuits. Those are the same red flags that can make a building hard to finance. Our guide to the condo questionnaire and HOA review shows how to read them like a lender.

Special assessments

A special assessment is a one-time or temporary charge on owners to pay for a large project, such as a roof, masonry repairs, or elevator modernization. Unpaid or upcoming assessments can affect your budget, and large unfunded projects can affect the building’s eligibility for financing. Ask the seller and association whether any assessments are approved or under discussion, and settle in your contract who pays them. Our guide to condo special assessments covers Illinois vote rules, how lenders review them, and how they affect your debt-to-income ratio. Regular monthly dues count against that ratio too; see HOA dues and your mortgage approval for a worked example.

Chicago’s façade ordinance

Chicago requires buildings 80 feet or taller to have their exterior walls inspected on a regular cycle by an Illinois-licensed architect or structural engineer, with reports filed with the city. Inspections can turn up masonry or façade repairs that become large expenses or special assessments. If you’re buying in a high-rise, ask the association for its most recent façade inspection report and any repair plan. Our guide to high-rise condos covers what else lenders check, and this year’s façade filing deadlines are in our updates.

Deconversion

Illinois law lets condo owners sell the entire building, called a deconversion, with a supermajority vote: at least 75% for buildings of four or more units under state law. In Chicago, a city ordinance raises the threshold to 85 percent of the unit owners. Owners who object in writing within 20 days of the vote have added protections on price and relocation costs (765 ILCS 605/15; Chicago Municipal Code 13-72-085). A pending deconversion offer or vote is a major issue to raise with your attorney before buying, and conventional lenders generally won’t finance units in a building that is voting on a sale. Our condo deconversion guide covers the vote, objectors’ payouts and what happens to your mortgage.

Step-by-step: financing a condo in Chicago

Get pre-approved, and tell your lender you’re shopping for a condo, since some loan types and pricing differ.
Check the building early. Ask your agent and lender whether the building is warrantable, FHA-approved, or VA-approved before you make an offer.
Build a financing contingency into your offer with enough time for the condo review, which takes longer than for a house.
Request the 22.1 disclosures and have them reviewed, ideally by an Illinois real estate attorney, which is standard practice in Chicago transactions.
Your lender orders the condo questionnaire and budget from the association or management company. Fees are common.
Appraisal and underwriting review both you and the project.
Confirm insurance. You’ll usually need your own HO-6 (walls-in) policy on top of the building’s master policy.
Close.

Guides in this series

Frequently asked questions

Can I get a conventional loan on a condo with only 3% down?

Often, yes, for a primary residence in a warrantable building if you qualify for a 3% down program. Expect to pay private mortgage insurance, and note that condo pricing adjustments may affect your rate at higher loan-to-value ratios.

What happens if my building fails the condo review?

You may need a different loan type, such as FHA single-unit approval (if the building meets FHA’s rules), or a portfolio or non-QM loan for non-warrantable condos, which usually needs a bigger down payment. That’s why a financing contingency and early building checks matter.

Does the August 2026 change affect FHA or VA loans?

No. The end of limited and streamlined review applies to conventional loans sold to Fannie Mae and Freddie Mac. FHA and VA have their own condo approval systems.

How do I find out if a Chicago condo is FHA-approved?

Search HUD’s FHA-approved condominium list by building name, city, or ZIP code, and confirm the approval hasn’t expired. If it isn’t listed, ask a lender whether FHA single-unit approval is possible.

Do small Chicago condo buildings have an advantage?

For conventional loans, often yes. Fannie Mae now lets lenders waive project review for buildings with 10 or fewer units that aren’t part of a master association, as long as basic insurance and safety conditions are met.

What is the conforming loan limit for Chicago in 2026?

$832,750 for a one-unit property in Cook County. Loans above that amount are jumbo loans.

Sources

This guide is educational and is not lending, legal, or financial advice. Rules change and every building and borrower is different. Confirm details with a licensed mortgage professional and an Illinois attorney. See our Disclaimer.