Buyer Intelligence

Condo Buying in West Michigan (2026): The HOA Document Checklist That Prevents Financing Surprises

A West Michigan broker’s condo due diligence checklist for 2026: reserve studies, special assessments, insurance, delinquencies, and the 1076 questionnaire. Reduce financing surprises before closing.

BY THOMAS SWITEK SWITEK REAL ESTATE | eXp REALTY
Condo Buying in West Michigan (2026): The HOA Document Checklist That Prevents Financing Surprises

In West Michigan, most condo deals don’t fall apart because the unit is “bad.” They fall apart because the project can’t clear lender underwriting.

If your lender can’t approve the condo association’s budget, reserves, insurance, maintenance condition, or special assessments, you can be days from closing and still end up with a denial. This article is a practical, lender-aware due diligence checklist tailored to how condo financing actually works in 2026.

Why condo financing is different: you’re buying a unit and underwriting a business

With a single-family home, the lender underwrites the borrower and the property. With a condo, the lender is also underwriting the association that maintains the common elements that protect the collateral.

Fannie Mae has been direct about what can push a condo project into an “unavailable” status: unresolved critical repairs or significant deferred maintenance, active or pending significant litigation, too much commercial space, inadequate insurance, or resort-style characteristics tied to transient occupancy. If a project is unavailable, the loan typically cannot be sold to Fannie Mae. ([fanniemae.com](https://www.fanniemae.com/research-and-insights/perspectives/future-condo-lending))

The form that drives everything: the Condo Project Questionnaire (1076)

Most lenders (and many condo management companies) run the process through the standardized Condo Project Questionnaire used by the GSEs (Fannie Mae Form 1076 / Freddie Mac Form 476). Fannie Mae notes these standardized forms are optional, but recommended because they create a consistent method of collecting project information from HOAs. ([singlefamily.fanniemae.com](https://singlefamily.fanniemae.com/originating-underwriting/condo-co-op-and-pud-eligibility))

The questionnaire isn’t just administrative. It hits the deal-killers:

Practical takeaway: ask early who completes the 1076, how much it costs, and how long it takes. In some associations, the turnaround time is the hidden timeline risk.

A 2026 reality: reserve study rules tightened in August

If you are buying in a smaller attached condo project (common in parts of Greater Grand Rapids and in certain lakeshore configurations), pay close attention to reserve documentation.

Freddie Mac’s condo FAQ highlights an important timing change: sellers could only use Streamlined Review for certain attached 5- to 10-unit projects (as part of a master association) if the application was received prior to August 3, 2026. ([sf.freddiemac.com](https://sf.freddiemac.com/faqs/condominium-unit-mortgage-faq))

It also notes that if a reserve study is used as an exception to reserve requirements, then for mortgages with an application received date on or after August 3, 2026, sellers can’t rely on a baseline funding methodology to determine adequacy, and the highest recommendation in the reserve study must be used. ([sf.freddiemac.com](https://sf.freddiemac.com/faqs/condominium-unit-mortgage-faq))

Practical takeaway: in 2026, “we have a reserve study” is not the finish line. The lender may scrutinize the funding methodology and whether the budget is actually matching the reserve study’s higher recommendation.

The West Michigan condo document checklist (request this before you feel “emotionally attached”)

These are the documents I like to see requested early, ideally before the inspection window is nearly over. Not every association has everything neatly packaged, but you can reduce surprises by being systematic.

1) Governing documents (what you can and cannot do)

Why it matters: restrictions on leasing, use, or improvements can change the property’s value to you and can also affect lender eligibility in certain cases.

2) Budget, financials, and delinquencies (the lender’s stress test)

Under Fannie Mae’s Full Review framework, one key threshold is that no more than 15% of total units can be 60 days or more past due on common expense assessments, and no more than 15% can be 60+ days past due on each special assessment. Fannie Mae also evaluates whether the budget is adequate and generally expects replacement reserves of at least 10% of the budget, with limited exceptions and documentation when a reserve study is used in lieu of the calculation. ([guide-selling.fanniemae.com](https://guide-selling.fanniemae.com/sel/b4-2.2-02/full-review-process))

Why it matters in West Michigan: smaller associations can be more sensitive to a few owners falling behind or a single large repair. That doesn’t make the condo “bad,” but it can make conventional financing harder.

3) Reserve study and capital plan (what’s coming next)

Why it matters: even when the unit inspection looks fine, the lender is focused on the project’s ability to preserve the building and common elements that protect long-term collateral value.

4) Special assessments (the net proceeds and cash-to-close trap)

The 1076 addendum specifically asks about current and planned special assessments, including terms and purpose. ([fanniemae.com](https://www.fanniemae.com/content/guide_form/1076.pdf))

Deal strategy note: special assessments are not just a “who pays what” negotiation. They can change debt-to-income ratios and lender comfort, and they can alter appraisal and marketability if they signal unresolved deferred maintenance.

5) Insurance package (often the slowest, most misunderstood part)

Michigan’s Department of Insurance and Financial Services notes that Michigan law does not require homeowners insurance, but if you finance the home, the lender will likely require insurance and will specify required coverage. ([michigan.gov](https://www.michigan.gov/difs/news-and-outreach/faq/insurance/info-purchasing-home-insurance))

On the lending side, Fannie Mae’s project review materials emphasize that lenders must validate compliance with applicable insurance requirements, and that delivery systems may reject loans for projects marked unavailable for insurance reasons as of the note date. ([guide-selling.fanniemae.com](https://guide-selling.fanniemae.com/sel/b4-2.2-02/full-review-process))

Why it matters: in 2026, insurance is not a checkbox. Rising premiums, higher deductibles, and coverage limitations can trigger lender conditions late in the process.

6) Meeting minutes and litigation (the “read between the lines” documents)

Why it matters: minutes reveal what’s actually happening: recurring water intrusion, contractor failures, disputes over structural issues, or an assessment that has not yet been formally adopted.

Michigan-specific note: condo owners have a statutory right to examine association records

When you are a buyer, you are typically requesting documents through the seller, the association, or the management company. Michigan law helps explain why those records exist.

Under Michigan’s Condominium Act, the association’s books, records, contracts, and financial statements concerning the administration and operation of the project must be available for examination by co-owners and their mortgagees at convenient times. The statute also addresses when an association must have its books/records/financial statements audited or reviewed by a CPA (with an opt-out mechanism). ([law.justia.com](https://law.justia.com/codes/michigan/chapter-559/statute-act-59-of-1978/section-559-157/))

Practical takeaway: if a seller has lived in the condo for years, they may have more power than they realize to obtain missing financials or clarify vague assessment language. (This is not legal advice. For legal interpretation or enforcement, consult an attorney.)

Offer and timeline strategy: how to avoid a “day 27 denial”

Here’s the approach that tends to protect buyers in real life, especially when lenders are overloaded and management companies are slow.

Step 1: Ask your lender upfront how they handle condo projects

Step 2: Write an offer that treats condo docs as a real contingency

Why it matters: you do not want your inspection clock expiring before you even have the association’s financials and insurance in hand.

Step 3: Separate “unit issues” from “project issues”

If the inspection turns up a normal unit-level repair, that’s one negotiation. If the docs suggest project-level deferred maintenance or funding gaps, you may need to renegotiate price, concessions, or even financing type. Those are different conversations, and mixing them often leads to bad decisions.

Seller strategy (and listing prep): build a lender-ready condo package before you list

If you are selling a condo in Greater Grand Rapids or along the lakeshore, there is one simple way to reduce surprises: assemble the lender-facing documents before the first showing.

This doesn’t “force” lender approval, but it often prevents the worst outcome: multiple buyers falling out at the same underwriting step, then the property getting a reputation it doesn’t deserve.

Bottom line

In 2026, condo due diligence is less about “does the unit look nice?” and more about “can the project pass the lender’s risk screen without last-minute conditions?” The good news is that most of the risk is visible if you request the right documents early and read them like an underwriter would.

If you want a second set of eyes on a condo’s association documents before you commit, I can help you build a request list, pressure-test the red flags, and coordinate with your lender so you are not learning critical information the week of closing.

For more West Michigan real estate guidance and due diligence checklists, browse the Switek Insights library.