Last reviewed: October 23, 2026 · By the Chicago Condo Loans Editorial Team
Quick answer When you’re selling a condo in Chicago, your buyer’s lender reviews your building as well as your buyer. A conventional loan needs the building to meet Fannie Mae’s project standards (or qualify for a waiver), an FHA loan needs FHA project or single-unit approval, and a VA loan needs a VA-approved project. Illinois law also requires you to obtain the association’s Section 22.1 disclosures for the buyer, and the seller pays 0.45% of the price in state, county and city transfer taxes. Checking the building’s loan status and ordering the 22.1 package before you list avoids surprises after you accept an offer.
This is part of our complete guide to Chicago condo loans.
Why does the buyer’s loan matter when you sell a condo?
With a house, the lender mostly looks at the buyer and the property. With a condo, the lender also looks at the whole building: its budget, reserves, insurance, litigation and ownership mix. If the building doesn’t meet the rules of the buyer’s loan program, the buyer may have to switch loans or walk away. That shapes who can buy your unit and how fast the deal closes.
| Buyer’s loan | What the building needs | What a seller can check before listing |
|---|---|---|
| Conventional (Fannie Mae) | A Full Review for most attached units in buildings of 11 or more units; a waiver of project review for 2- to 4-unit projects and for 5- to 10-unit projects not part of a larger development or master association | Ineligible features: commercial space over 35%, unfunded repairs over $10,000 per unit due within 12 months, more than 15% of units 60+ days delinquent, a single owner over Fannie Mae’s limits, condo-hotel features |
| FHA | The project on HUD’s approved list (approval lasts 3 years) or FHA single-unit approval (buildings of 5+ units only) | Whether the building’s FHA approval is current or expired, and how many units already have FHA loans |
| VA | A VA-approved project; FHA approval doesn’t carry over | Whether the building appears as accepted on VA’s Condo Report |
| Jumbo (over $832,750 in Cook County in 2026) | The lender’s own building review | The same budget, reserve, insurance and litigation items lenders usually ask about |
| Cash | No lender review | Nothing loan-related, though the buyer still gets the 22.1 disclosures |
Details on each review are in warrantable vs. non-warrantable condos, FHA condo approval, VA condo loans and small condo buildings. Fannie Mae and Freddie Mac retired the limited review for applications from August 3, 2026, so more established buildings now get a full review; see the August 2026 limited review change.
What documents must an Illinois condo seller provide?
Section 22.1 of the Illinois Condominium Property Act puts the job on the selling owner (other than the developer): you obtain these items from the board and make them available to a prospective buyer on demand.
- The declaration, bylaws, other condominium instruments, and rules and regulations
- A statement of any liens and of your account, including unpaid assessments and other charges
- Capital expenditures the association expects in the current or next two fiscal years
- The status and amount of the reserve fund, including any amount earmarked for a specific project
- The association’s most recent financial statement for its last fiscal year
- The status of pending suits or judgments involving the association
- The insurance coverage the association provides for all owners
- A statement that any improvements or alterations by prior owners are believed in good faith to comply with the condominium instruments
- The name and mailing address of the principal officer, or the officer or agent who receives notices
The board must provide the package within 10 business days of a written request. The association can charge you a reasonable fee for its direct out-of-pocket and copying costs, capped at $375 (adjusted each year by the change in the Consumer Price Index), plus up to $100 more for rush service within 72 hours. The buyer’s lender usually sends the association a separate condo questionnaire; see the condo questionnaire and HOA review.
What other seller disclosures apply to a Chicago condo?
Illinois Residential Real Property Disclosure Act. The Act covers property with one to four dwelling units, and it expressly includes condominium units along with the limited common elements assigned to them. The seller fills out the state’s disclosure report, which the Act expects to be delivered before the contract is signed. If a report that discloses a material defect arrives only after all parties have signed, the buyer can terminate the contract within 5 business days of receiving it and get the earnest money back. That right ends once the property is conveyed.
Federal lead-based paint disclosure. For housing built before 1978 (studios are exempt unless a child under 6 lives or will live there), the seller must, before the buyer is bound by the contract, give the buyer the EPA lead hazard pamphlet, disclose any known lead-based paint or hazards, and hand over available records and reports, including those on common areas. The buyer gets a 10-day period to arrange a lead inspection or risk assessment, unless both sides agree in writing to a different period or the buyer waives it in writing.
What does a seller pay at a Chicago condo closing?
| Item | Seller’s share | On a $350,000 sale |
|---|---|---|
| Chicago transfer tax (CTA portion) | $1.50 per $500 | $1,050 |
| Cook County transfer tax | $0.25 per $500 | $175 |
| Illinois transfer tax | $0.50 per $500 | $350 |
| Total seller transfer taxes | $2.25 per $500 (0.45%) | $1,575 |
| Chicago Full Payment Certificate (water and utility charges) | $50 application fee, plus any unpaid balance | $50 plus any balance |
The City of Chicago requires a Full Payment Certificate for transfers of real property: it shows the utility account is paid in full, and without it the parties can’t get the city transfer tax stamps needed to record the deed. The buyer, seller or an attorney can apply online or at City Hall; the fee is $50 (none for transfer-tax-exempt transfers), any balance must be paid first, and the city says applications are often finished the same day but agents should allow up to 10 business days. If a required certificate isn’t obtained, buyer and seller are jointly liable for the unpaid charges. Unlike non-condo homes, condo resales don’t need Chicago’s certificate of zoning compliance. Who pays which other costs, including the property tax proration, is set by the contract; see condo closing costs in Chicago.
How much can a seller credit the buyer?
Seller credits toward the buyer’s costs are capped by the buyer’s loan program, so a credit you agree to may not all be usable.
| Buyer’s loan | Limit on seller and other interested-party contributions |
|---|---|
| Fannie Mae, principal residence or second home, LTV over 90% | 3% of the lower of price or appraised value |
| Fannie Mae, principal residence or second home, LTV 75.01–90% | 6% |
| Fannie Mae, principal residence or second home, LTV 75% or less | 9% |
| Fannie Mae, investment property | 2% |
| VA | Seller concessions capped at 4% of the reasonable value; credits for normal closing costs aren’t limited |
| FHA | FHA sets its own limit; confirm with the buyer’s lender |
Under Fannie Mae’s rule, any contribution above the limit is treated as a sales concession: it is subtracted from the sales price and the loan-to-value ratio is recalculated. Fannie Mae does let an interested party pay the buyer’s HOA assessments for up to 12 months after closing as an acceptable financing concession. Remember too that the buyer’s loan amount is based on the lower of the price or the appraised value, so a low appraisal can reopen negotiations; see condo appraisals.
What building issues can stall a buyer’s loan?
- Special assessments. Lenders review the purpose, amount, remaining balance and payoff date of any current or planned assessment, and a project is ineligible if an assessment is tied to an unremediated critical repair. See condo special assessments.
- Big repairs. Unfunded repairs costing more than $10,000 per unit and due within 12 months make a building ineligible for Fannie Mae until the work is done and documented.
- Reserves. Under a full review the budget must include the highest recommended reserve allocation, and the reserve minimum rises from 10% to 15% of the budget on January 4, 2027; see the 2027 reserve change.
- Delinquencies. If more than 15% of units are 60 or more days behind on assessments, the building fails Fannie Mae’s full review (B4-2.2-01). FHA also asks how many units are more than 60 days past due, so high delinquencies hurt FHA buyers too.
- A pending sale of the building. A project going through termination, or with a pending vote on one, is ineligible for Fannie Mae (B4-2.1-03), which can stop a buyer’s conventional loan. See condo deconversion in Chicago.
- Insurance. The master policy has to meet the buyer’s loan program rules, including Fannie Mae’s deductible limits.
What should a seller do before listing a condo?
- Ask the board or manager for the 22.1 package early, and note any special assessments, reserve waivers or lawsuits it shows.
- Check whether the building is on HUD’s FHA-approved list and VA’s Condo Report, and whether either approval has expired.
- Ask the manager whether the building has completed lender questionnaires recently and whether any lender has declined it.
- Pay any open water or utility balance so the Full Payment Certificate isn’t held up.
- Complete the Illinois disclosure report (and the lead disclosure for pre-1978 buildings) before you sign a contract.
- Decide on any seller credit with the buyer’s loan limits in mind.
Frequently asked questions
Does the buyer’s loan type matter when selling a condo in Chicago?
Yes. Conventional, FHA and VA lenders review the building as well as the buyer. A unit in a building that fails Fannie Mae’s project standards, isn’t FHA-approved or isn’t VA-approved can lose buyers who use those loans, so check the building’s status before you list.
What documents does an Illinois condo seller have to provide?
Under Section 22.1 of the Illinois Condominium Property Act, a reselling owner must obtain from the board and make available to a prospective buyer the condo instruments and rules, a statement of liens and unpaid assessments, anticipated capital expenditures for the current and next two fiscal years, reserve status, the latest financial statement, pending suits or judgments, the association’s insurance, an alterations statement and the principal officer’s contact. The board must provide them within 10 business days of a written request.
How much can the association charge for the 22.1 disclosures?
The association may charge the seller a reasonable fee for its direct out-of-pocket and copying costs, capped at $375 and adjusted each year for inflation, plus up to $100 more for rush delivery within 72 hours.
What transfer taxes does a seller pay on a Chicago condo?
The seller pays the City of Chicago’s $1.50 per $500 transit portion, Cook County’s $0.25 per $500 and Illinois’s $0.50 per $500, or 0.45% of the price in total. On a $350,000 condo that is $1,575. The buyer pays the city’s $3.75 per $500.
How much can a condo seller pay toward the buyer’s closing costs?
It depends on the buyer’s loan. Fannie Mae limits interested party contributions to 3%, 6% or 9% of the lower of the price or appraised value for a principal residence or second home, depending on the loan-to-value ratio, and 2% for an investment property. VA caps seller concessions at 4% of the reasonable value but doesn’t limit credits for normal closing costs. FHA has its own rules, so confirm with the buyer’s lender.
Sources
- 765 ILCS 605/22.1, Illinois Condominium Property Act (resale disclosures)
- 765 ILCS 77/5, Residential Real Property Disclosure Act (definitions)
- 765 ILCS 77/40, Residential Real Property Disclosure Act (material defects; right to terminate)
- 40 CFR 745.103, definition of target housing
- 40 CFR 745.107, seller disclosure requirements
- 40 CFR 745.110, opportunity to conduct an evaluation
- City of Chicago Department of Finance: Full Payment Certificates
- City of Chicago: Real Property Transfer Tax
- Fannie Mae Selling Guide B4-2.1-02, Waiver of Project Review (08/05/2026)
- Fannie Mae Selling Guide B4-2.1-03, Ineligible Projects (08/05/2026)
- Fannie Mae Selling Guide B3-4.1-02, Interested Party Contributions (IPCs)
- Fannie Mae Lender Letter LL-2026-03, Updates to Project Standards and Property Insurance Requirements
- 24 CFR 203.43b, FHA eligibility of condominium units
- 38 CFR 36.4360, VA condominium project approval
- VA.gov: VA funding fee and loan closing costs
Educational content only. We are not a lender or broker, and this is not lending, legal or financial advice. Rules change; confirm details with your lender and attorney.