First-Time Condo Buyer Checklist for Chicago (2026)

Last reviewed: October 9, 2026

Quick answer A first-time condo buyer in Chicago has two sets of hurdles: qualifying yourself and qualifying the building. You count as a first-time homebuyer for Fannie Mae if you have not owned a home in the past three years, which opens 3%-down conventional loans and some pricing breaks. FHA (3.5% down) and VA (0% down) loans are open to repeat buyers too, but the building must be on the FHA or VA approved list or qualify another way. The order that saves the most money and time: get preapproved and ask how the lender will review the building, check the building before you write an offer, request the Illinois 22.1 disclosures right after the contract, finish homeownership education before closing, and file for the Cook County homeowner exemption once you move in.

This checklist is part of our complete guide to Chicago condo loans. Each step links to the guide that covers it in depth.

Do you count as a first-time homebuyer?

Fannie Mae’s Selling Guide defines a first-time homebuyer as someone who is buying the home, will live in it as a principal residence, and had no ownership interest (sole or joint) in a residential property during the three years before the purchase. A displaced homemaker or single parent also counts if their only ownership in that period was a joint interest with a spouse in a principal residence.

So if you sold a home more than three years ago, you can count as a first-time buyer again. On a loan with two borrowers, the rules differ by product: the standard 97% loan needs only one first-time buyer, while the homeownership education rule turns on whether all borrowers are first-time buyers.

Which loans work best for a first-time condo buyer?

Option	Minimum down	First-time buyer rule	Condo catch
Fannie Mae standard 97% LTV	3%	At least one borrower must be a first-time homebuyer	Fixed-rate only; loan up to the $832,750 Cook County conforming limit; building must pass the lender’s Fannie Mae project review
Fannie Mae HomeReady	3%	None, but qualifying income must be at or below 80% of area median income	Condos eligible; same project review
FHA	3.5% with a 580+ credit score	None	Building must be FHA-approved, or the unit must get a single-unit approval (5+ unit buildings only); 2026 Cook County limit $541,287
VA	0% (price at or below appraised value)	None; for eligible veterans and service members	Building must be in a VA-approved project; FHA approval doesn’t carry over
IHDA Access programs (paired with a first mortgage)	Buyer pays the greater of $1,000 or 1% of the price	Only Access Home requires first-time (or exempt) buyers	IHDA doesn’t state condo rules on its program page; ask a participating lender

Sources: Fannie Mae Selling Guide and Eligibility Matrix; HUD (ML 2010-29, ML 2025-23); VA.gov; IHDA. Lenders may set stricter rules.

Two pricing points matter for first-time buyers. Fannie Mae adds a condo price adjustment of 0.750% of the loan amount when the loan-to-value ratio is above 75%, but its price adjustments are waived for first-time homebuyers with income at or below 100% of area median income (120% in high-cost areas) and for HomeReady loans. Ask the lender to show whether the waiver applies to you. Details and the PMI side are in our condo down payment and PMI guide.

IHDA’s current Access programs offer 4% of the price up to $6,000 (Access Forgivable, forgiven over 10 years), 5% up to $7,500 (Access Deferred, interest-free and deferred for the life of the mortgage), 10% up to $10,000 (Access Repayable, repaid over 10 years), and 6% up to $15,000 (Access Home, deferred, for first-time buyers, eligible veterans and buyers in targeted areas). All require a 30-year fixed first mortgage, a 640 credit score, homeownership education before closing, and income and price limits.

What should you do, in order?

1. Before you tour: get preapproved with the building in mind

Get a preapproval that names the loan type (conventional, HomeReady, FHA or VA). The loan type decides which buildings you can buy in.
Budget with HOA dues included. Lenders count association dues and any special assessment payments in your monthly housing expense and debt-to-income ratio, so a $450 monthly assessment cuts your price range much like a bigger mortgage payment. See HOA dues and your condo mortgage.
Ask the lender which review it will use for condos (Fannie Mae full review, a waiver for small buildings, FHA or VA approval) and what its questionnaire costs.
Every Loan Estimate uses the same federal form and must arrive within three business days of your application, so getting two or three lets you compare rates and fees line by line.

2. While you shortlist units: screen the building

FHA or VA buyers: check the building on HUD’s FHA condo list or VA’s Condo Report before you fall in love with a unit. See FHA condo approval and VA condo loans.
Ask the listing agent about special assessments (current or planned), pending lawsuits, and whether the association is in a large repair project. Any of these can make a building non-warrantable; see warrantable vs. non-warrantable condos.
In a high-rise (80 feet or taller), ask about the city façade inspection status and planned work. See high-rise condos.
New or recently converted building? Different rules apply (presales, developer control). See new construction condo loans.

3. Right after the contract: request the documents

Ask the seller for the Illinois 22.1 disclosures. The association must provide them within 10 business days of a written request; they include the budget, reserve status, anticipated capital expenditures for the current and next two fiscal years, unpaid assessments, pending suits and insurance. The fee is capped at $375 (adjusted for inflation), plus $100 for a 72-hour rush.
Your lender orders its condo questionnaire from the management company. Read your own copy too; our questionnaire guide explains each answer.
Check insurance early. Fannie Mae caps the master policy deductible at 5% of coverage, and you need an HO-6 policy if the master policy has a per-unit deductible or doesn’t cover your interior. See 2026 condo insurance requirements.

4. During underwriting: watch the appraisal and the building review

Your loan-to-value ratio is based on the lower of the price or the appraised value. If the unit appraises low, you can ask for one reconsideration of value with up to five alternative comparable sales. See condo appraisals. Fannie Mae and Freddie Mac’s redesigned appraisal report became mandatory for new appraisals submitted on or after November 2, 2026, though lenders may use the old forms under a temporary exception until May 19, 2027; see what UAD 3.6 means for condo buyers.
If the building fails the lender’s review, you may be able to switch loan types or lenders before your financing contingency runs out. Know that date.

5. Before closing: education and the Closing Disclosure

Complete homeownership education before closing if your loan requires it: Fannie Mae requires it when all borrowers are first-time homebuyers and the loan-to-value ratio is above 95%, on HomeReady purchases when all occupying borrowers are first-time buyers, and on all IHDA Access loans.
You must receive the Closing Disclosure at least three business days before closing. Compare it with your Loan Estimate.
Plan for the buyer’s Chicago transfer tax: $3.75 per $500 of price (0.75%), on top of lender, title and association move-in costs. See condo closing costs.

6. After you move in: claim your savings

Apply for the Cook County homeowner exemption, which reduces the unit’s equalized assessed value by $10,000 for a principal residence. First-time applicants file with the Cook County Assessor; once approved, it renews automatically while you keep living there.
On a conventional loan, you can ask to cancel PMI when the balance is scheduled to reach 80% of the original value, and it ends automatically at 78%. FHA annual premiums last 11 years or the life of the loan, depending on your down payment.
From January 4, 2027, Fannie Mae and Freddie Mac full reviews require condo budgets to put at least 15% into reserves (up from 10%). If you plan to sell or refinance in a few years, a well-funded association matters. See the 15% reserve rule.

Which building problems most often stop a first-time buyer’s loan?

Red flag	Fannie Mae limit (full review)	Why it matters to you
Owners behind on dues	No more than 15% of units 60+ days delinquent (same limit for FHA)	Signals budget stress and future special assessments
Unfunded critical repairs	Ineligible if over $10,000 per unit due within 12 months	Building is non-warrantable until the work is done and documented
Thin reserves	At least 10% of the budget to reserves, 15% from Jan. 4, 2027	Underfunded buildings fail the review or pass costs to owners
Commercial space	No more than 35% of the project’s square footage	Mixed-use buildings can fail conventional and FHA reviews
One owner holds many units	No more than 20% of units in a 21+ unit project (some exceptions)	Concentrated ownership is a resale and budget risk
Hotel-style operation	Condotels are ineligible	You would need non-warrantable financing

Source: Fannie Mae Selling Guide B4-2.1-03 and Lender Letter LL-2026-03. Lenders may add overlays.

A special assessment isn’t automatically a deal-breaker. Lenders look at what it pays for and how much is left, and Illinois law gives owners a petition right when a year’s assessments jump above 115% of the prior year. See condo special assessments.

How much cash does a first-time condo buyer need?

Example: a $300,000 Chicago condo, using only the figures that are fixed by rule. Lender fees, title charges, prepaid taxes and association move-in fees vary, so get them from your Loan Estimate.

Item	Fannie Mae 97%	FHA
Down payment	$9,000 (3%)	$10,500 (3.5%)
Chicago buyer transfer tax (0.75%)	$2,250	$2,250
Upfront mortgage insurance	None (monthly PMI instead)	1.75% of the base loan, usually financed
22.1 disclosure fee	Up to $375 (CPI-adjusted); your contract decides who pays	Same

Figures from Fannie Mae, HUD, the City of Chicago and 765 ILCS 605/22.1. Who pays the 22.1 fee depends on your contract.

Frequently asked questions

Am I a first-time homebuyer if I owned a home years ago?

Yes, for Fannie Mae, if you had no ownership interest in a residential property during the three years before this purchase and you will live in the condo as your principal residence. A displaced homemaker or single parent whose only ownership in that period was jointly with a spouse can also qualify.

Can a first-time buyer put 3% down on a Chicago condo?

Yes, with Fannie Mae’s standard 97% loan (at least one borrower must be a first-time homebuyer) or HomeReady (income limit of 80% of area median income, no first-time rule), as long as the loan is fixed-rate, within the $832,750 conforming limit, and the building passes the lender’s project review.

Do first-time buyers need FHA to buy a condo?

No. FHA is one option at 3.5% down with a 580 credit score, but the building must be FHA-approved or the unit must get a single-unit approval. Conventional 3% down loans can cost less for buyers with strong credit and can work in buildings that are not FHA-approved.

Is homeownership education required?

Sometimes. Fannie Mae requires it before closing when all borrowers are first-time homebuyers and the loan-to-value ratio is above 95%, and on HomeReady purchases when all occupying borrowers are first-time buyers. IHDA’s Access programs also require it.

When should I check whether a condo building qualifies for my loan?

Before you make an offer. Check the FHA or VA approved lists if you are using those loans, and ask about special assessments, lawsuits, delinquencies and major repairs. After the contract, request the Illinois 22.1 disclosures, which the association must provide within 10 business days.

Sources

Chicago Condo Loans is an independent educational resource, not a lender or mortgage broker. This page is for education only and is not lending, legal or financial advice. Confirm current rules with your lender and attorney.