When a unit owner sells or refinances, the buyer's lender often contacts a condominium association or management company as part of the loan underwriting process. In recent years, those questionnaires have grown significantly longer and more technical, and the new Fannie Mae and Freddie Mac policy changes announced on March 18 are likely to make that problem worse.
Why Lenders Are Asking More
Fannie Mae and Freddie Mac back an estimated seventy percent of all condominium loans in the United States. When a lender originates a loan, it typically intends to sell that loan into the secondary market, which means it must satisfy Fannie Mae and Freddie Mac underwriting requirements. As part of that process, lenders now require written answers about building safety, structural integrity, reserve funding, pending special assessments, and other community conditions.
The March 18 updates raise the stakes further. Fannie Mae and Freddie Mac are increasing the minimum reserve funding requirement from ten percent to fifteen percent of the annual budget, effective January 4, 2027. They are also eliminating the limited review process, which historically covered roughly forty percent of all condo project reviews, meaning more transactions will now require a full project review with more comprehensive documentation from the association.
Lenders are going to be asking more, not less. Which brings us to the question we hear most often.
Does Your Association Have a Legal Obligation to Answer?
The short answer is no. Florida law does not require a community association to complete a lender questionnaire. These forms are a creation of the lending industry, not a statutory obligation. Managers in particular ask us about this frequently, because these questionnaires can be intrusive and time consuming to complete, especially when the answers require tracking down financial records, insurance documents, or information about pending litigation.
So the association can simply decline to answer, right?
Technically, yes. Practically, that is a decision with real consequences.
The Practical Reality Boards Need to Understand
If the association does not respond to a lender's questionnaire, the loan likely does not get approved. If loans are not getting approved in your community, you have effectively frozen conventional lending there. Buyers who cannot obtain financing either walk away or offer less, which puts downward pressure on sale prices throughout the community.
When property values stagnate or sales fall through, owners notice. They may not understand the mechanics of secondary mortgage market underwriting, but they know their neighbor's unit sat on the market for months or sold below asking price. That frustration lands on the board. Suddenly a routine lender questionnaire has become a governance headache.
This is why, even though there is no legal obligation to respond, most associations are better served by taking a thoughtful approach to these requests rather than ignoring them.
What That Looks Like in Practice
Under Section 718.111(12)(e), Florida Statutes, a condominium association and its authorized agent are not required to provide a prospective purchaser or lienholder with information beyond what the statute itself requires to be disclosed. For responses that go beyond those statutory requirements, the association may charge a reasonable fee not to exceed $150, plus the reasonable cost of photocopying and any attorney's fees incurred in connection with the response. Importantly, the association and its agent are not liable for providing such information in good faith if the person responding includes a written statement that the responses are made in good faith and to the best of their ability as to accuracy.
In practical terms, this means associations are generally on solid ground providing factual information within their own knowledge, including reserve balances, budget figures, pending special assessments, known violations, and active litigation. That type of disclosure is reasonable and appropriate, and the association can charge for the time it takes to compile it.
Where boards and managers should be more careful is with questions that effectively ask for professional opinions the association is not qualified to give. Questions about structural integrity, building safety certifications, or habitability go beyond what a volunteer board or property manager can accurately represent. Answering those questions carelessly, simply to satisfy a lender's deadline, can expose the association to liability in personal injury cases, negligence claims, or disputes between buyers and sellers. The good faith disclaimer language referenced in the statute provides some protection, but it is not a substitute for understanding what your association can and cannot accurately certify.
The new Fannie Mae and Freddie Mac requirements are also a useful reminder to review reserve funding levels and insurance coverage before the phased deadlines arrive in 2026 and 2027. Communities that fall out of compliance may find that financing obstacles become a recurring problem rather than an occasional one.
Florida condominium associations and homeowners associations navigating these issues benefit from working with an experienced condo lawyer or Florida HOA lawyer who understands both the legal framework and the practical realities of how these questionnaires affect closings. A Florida real estate lawyer familiar with community association law can help boards and managers understand what they are and are not obligated to disclose, and how to respond in a way that protects the association without unnecessarily stalling a sale.
If your association has questions about lender questionnaires or how to prepare for the coming changes, our team of community association attorneys is available to help.
