Buying a Chicago Condo? What to Review Before Making an Offer

Chicago Condo Due Diligence: Verified Facts

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Evidence note: Illinois Section 22.1 addresses governing documents, unpaid assessments and authorized charges, anticipated capital expenditures, replacement reserves, financial condition, litigation or judgments, association-provided insurance, certain prior alterations, and association contact information.

1. What Do the HOA Assessments Actually Pay For?

The Bottom Line: Don't judge a Chicago condo's HOA assessment simply by whether the monthly number looks high or low. Find out what it pays for, what you will pay separately, and how the association uses those funds.

Depending on the property, assessments may contribute toward common-area maintenance, property management, association insurance, shared utilities, elevators and mechanical systems, cleaning, landscaping, snow removal, building staff, amenities, routine repairs, and reserve funding.

Questions to Ask About the HOA Assessment

• What is the current regular assessment for this unit?
• What services are included?
• Which utilities are included?
• Are any utilities separately metered?
• What expenses will I pay directly?
• Has the assessment recently changed?
• Does the current budget indicate another change?
• How much is being allocated toward reserves?
• Are parking, storage, or other services charged separately?

Buyer takeaway: Compare the total monthly ownership picture, not the HOA number alone.

2. How Should You Evaluate the Association's Reserves?

The Bottom Line: Evaluate the reserve fund in relation to what the property expects to repair or replace. There is no single dollar amount that proves every Chicago condominium has adequate reserves.

Reserve funds can help associations prepare for significant common-property expenses. Depending on the property, those expenses might involve roofs, elevators, façades, masonry, garages, plumbing systems, heating or cooling equipment, or other common elements.

Questions to Ask About Reserves

• What is the current reserve balance?
• How are reserves funded?
• Is any money already earmarked for a particular project?
• Is a reserve study available?
• If so, when was it prepared or updated?
• What significant capital expenditures are anticipated?
• How are those projects expected to be funded?
• Has the association previously used special assessments to fund major work?

Section 22.1 requires information about the status and amount of the reserve replacement fund, including amounts earmarked for specified projects. It separately calls for anticipated capital expenditures during the current or succeeding two fiscal years.

Buyer takeaway: Evaluate reserves against anticipated obligations, not an arbitrary benchmark.

3. Are There Special Assessments—or Signs of Future Costs?

The Bottom Line: Find out whether a special assessment has been approved, what it pays for, how much applies to the unit, and what remains unpaid. Then look beyond the current assessment to understand whether other significant projects may require funding.

Don't stop at “Are there any special assessments?” A building can have no currently approved assessment and still have anticipated capital expenses.

If an Assessment Exists, Ask:

• What does it fund?
• What amount is attributable to this unit?
• How much has already been paid?
• Are installments outstanding?
• When are remaining payments due?
• How will responsibility for those payments be handled in the transaction?
• Are additional projects being discussed?

Legal planning note: Your Illinois real estate attorney should advise you about contractual responsibility for unpaid or future assessment obligations.

Section 22.1 separately addresses certain unpaid assessments and charges, anticipated capital expenditures, and replacement reserves.

Buyer takeaway: “No special assessment” answers only one question. You still need to understand what work may be coming and how it may be funded.

4. What Does the Building's Physical Condition Tell You?

The Bottom Line: Association finances make more sense when you compare them with the actual condition and anticipated needs of the building.

A reserve balance can look strong in isolation. Its meaning changes if significant common-element work is approaching.

Where Available and Relevant, Consider Reviewing:

• reserve studies
• engineering or structural reports
• recent board or association meeting records
• information about significant completed repairs
• information about planned common-element projects
• relevant City of Chicago building records
• known recurring maintenance concerns

Meeting records can be useful when they show repeated discussion of repairs, project planning, insurance matters, assessments, or other building-level issues.

Context matters: The existence of a building permit alone is not necessarily negative. A permit may simply reflect authorized work. Ask the appropriate professional about anything material you do not understand.

Questions Worth Asking

• What major common elements have recently been repaired or replaced?
• What significant work is currently planned?
• Are recurring maintenance issues being discussed?
• Is an engineering report available?
• Does a reserve study identify major future work?
• Does the association have a clear funding strategy for that work?

Buyer takeaway: Connect the physical condition of the property with the association's financial plan.

5. What Should You Review About Condo Insurance?

The Bottom Line: Understand what the association's master policy covers, what may fall outside that coverage, the applicable deductibles, and what coverage you may need individually.

Condo insurance generally requires buyers to think at two levels: association/master coverage and individual unit-owner coverage.

What Should You Discuss?

• master-policy coverage
• deductibles
• relevant exclusions or limitations
• how the declaration allocates insurance responsibilities
• lender insurance requirements
• your proposed unit-owner policy
• possible loss-assessment exposure

Current Fannie Mae requirements provide separate standards for condominium master policies and individual unit-owner coverage. Fannie Mae currently allows a maximum per-occurrence deductible of 5% of the master-policy coverage amount for required perils. Where a master policy uses a per-unit deductible, the maximum is $50,000 per unit, and qualifying unit-owner coverage is required.

Important: These are Fannie Mae financing standards, not universal Illinois condominium insurance rules.

What About Loss-Assessment Coverage?

Ask your insurance professional. Depending on the master policy, association documents, circumstances of a loss, and your individual policy, certain loss-related costs could potentially be allocated to unit owners.

Buyer takeaway: Ask more than “Does the building have insurance?” Understand where the association's coverage ends and your potential exposure begins.

6. Can You Be Preapproved and Still Have a Condo Financing Problem?

The Bottom Line: Yes. Mortgage preapproval evaluates important aspects of you as a borrower. Depending on the loan and transaction, the condominium project may also require lender review.

Fannie Mae notes that mortgages secured by units in condominium projects can be affected by characteristics of the project as a whole. For an applicable loan, the lender must determine that the project meets the relevant eligibility requirements.

Project-Level Review Can Involve:

• association finances
• reserves
• special assessments
• insurance
• delinquent assessments
• litigation
• critical repairs
• governing documents
• other project characteristics

What Changed in 2026?

For applicable Fannie Mae loan applications dated on or after August 3, 2026, the former Limited Review process is retired.

Depending on the project and transaction, the lender may instead use Full Review or an available Waiver of Project Review.

Fannie Mae also announced another change that was not yet effective as of this article's August 27, 2026 review date. For applicable Full Reviews of applications dated on or after January 4, 2027, the standard minimum reserve allocation for capital expenditures and deferred maintenance increases from 10% to 15% of annual budgeted assessment income, subject to the applicable reserve-study alternative.

Financing note: The 15% standard is a Fannie Mae underwriting requirement for applicable Full Reviews beginning January 4, 2027. It is not an Illinois law requiring every condominium association to allocate 15% of its budget to reserves.

Ask Your Lender Early

• Does this property require project review?
• What review method applies?
• What association documents will underwriting need?
• Are there insurance requirements we should verify?
• Will reserves or a reserve study matter?
• Could an existing assessment affect the review?
• Are known building-condition issues relevant?

Buyer takeaway: Your personal preapproval does not automatically establish that every condominium project will work with your financing.

7. What Does Section 22.1 Tell You About an Illinois Condo?

The Bottom Line: For a qualifying resale by a unit owner other than the developer, Section 22.1 of the Illinois Condominium Property Act requires specified condominium information to be obtained from the board and made available to the prospective purchaser upon demand.

The statute covers:

1. the declaration, bylaws, other condominium instruments, rules, and regulations;
2. liens, unpaid assessments, and certain other authorized charges involving the unit;
3. anticipated capital expenditures for the current or succeeding two fiscal years;
4. the status and amount of the reserve replacement fund, including earmarked amounts;
5. the latest available statement of financial condition;
6. pending lawsuits or judgments involving the association;
7. association-provided insurance coverage;
8. a statement concerning certain prior improvements or alterations; and
9. the designated association officer or agent's identity and mailing address.

The designated association officer must furnish the required information within 10 business days of receiving the written request.

Other Documents May Matter Too

• the current operating budget
• reserve studies
• recent meeting records
• amendments
• special-assessment materials
• insurance documents
• rental restrictions
• pet rules
• remodeling requirements
• parking provisions
• storage provisions
• move-in procedures and charges

Buyer takeaway: The listing describes the unit being marketed. Association documents help explain the ownership environment you're entering.

8. What Else Should a Chicago Condo Buyer Verify?

The Bottom Line: Property taxes and parking can materially affect your ownership costs and property rights, so they deserve their own verification.

Check the Cook County Property-Tax Information

Don't assume the seller's current tax bill tells you exactly what your future tax liability will be.

Review the available property-tax and assessment information and identify exemptions reflected in the current bill. If an exemption, assessment issue, or other tax matter could materially affect your costs, discuss it with the appropriate tax or legal professional.

If another property interest associated with the purchase—such as parking—has its own PIN, review the applicable records for that property as well.

Verify Exactly What Parking You're Buying

“Parking included” can be insufficiently precise. Determine how the parking rights are legally structured and whether they actually transfer with the unit.

• What parking rights are included?
• How are those rights documented?
• Will they transfer with the condo?
• Is there a separate PIN?
• Are there separate taxes?
• Are separate association charges involved?

Legal planning note: Your attorney should verify the legal structure and transfer documents for the specific parking arrangement.

10. What Should Make You Investigate Further?

The Bottom Line: One unusual number does not automatically make a condo a bad purchase. More meaningful questions arise when information does not fit together or a material issue remains unexplained.

• significant planned work without a clear funding strategy
• reserve information that is difficult to reconcile with anticipated projects
• recurring special assessments without a clear explanation
• significant deferred-maintenance discussions
• unresolved physical-condition concerns
• material insurance questions
• significant litigation
• financial information that raises unanswered questions
• restrictions inconsistent with your plans
• financing concerns identified by your lender
• missing or inconsistent answers to material questions

Interpretation note: These are investigation triggers, not automatic reasons to reject a property.

11. Common Chicago Condo Buyer Misconceptions

12. Chicago Condo Buyer Checklist Before Making an Offer

Monthly Costs

• Confirm the regular HOA assessment.
• Identify what it covers.
• Determine which utilities are separate.
• Identify recurring parking, storage, or other charges.

Association Finances

• Review the operating budget.
• Review reserve information.
• Identify earmarked reserve funds.
• Review a reserve study if available.
• Identify anticipated capital expenditures.

Assessments and Building Condition

• Confirm current special assessments.
• Determine what remains attributable to the unit.
• Identify significant planned projects.
• Review relevant meeting records when available.
• Review relevant engineering or building information when available.

Insurance

• Review association insurance information.
• Understand applicable deductibles.
• Ask your lender what insurance information it needs.
• Discuss individual coverage and loss-assessment exposure with an insurance professional.

Financing

• Tell your lender you're considering a condo.
• Ask what project review applies.
• Identify association documents underwriting needs.
• Raise known assessments or building issues early.

Documents, Taxes, and Property Rights

• Review applicable Section 22.1 information.
• Read the declaration, bylaws, rules, and relevant amendments.
• Verify restrictions important to your plans.
• Review available Cook County tax information and exemptions.
• Verify parking and storage rights.

The Bottom Line

Buying a Chicago condo means evaluating the unit, the building, and the association.

Before moving forward, understand:

• what your HOA assessment actually pays for
• how the association is preparing for future expenses
• whether significant projects or special assessments require attention
• whether the building's physical condition aligns with its financial plan
• what the master insurance does and does not cover
• whether the project works with your financing
• what the governing documents mean for your ownership plans
• how taxes, parking, and other property-specific obligations affect the total picture

Instead of asking only “Do I like this condo?”, also ask:

“Do I understand the building and association I'm buying into?”

That question can lead to more informed due diligence before you make—or continue with—a Chicago condo purchase.