TRID on a condo or vacation home: questionnaire fees, HOA dues and the tolerance traps
The Loan Estimate shows HOA dues outside escrow, puts the condo questionnaire in the zero-tolerance bucket when the lender requires it, and leaves transfer fees and assessments uncapped; a non-warrantable finding is a changed circumstance that resets pricing.
Where the condo items land on the Loan Estimate
Page 1 lists HOA dues under “Estimated Taxes, Insurance & Assessments” with the answer “No” in the escrow column — a useful reminder that the servicer will not collect them. Page 2 splits the costs you care about across three boxes. Section B (services you cannot shop for) typically holds the appraisal — a condo appraisal uses a dedicated form that reports project data and often costs a little more than a house appraisal — plus the flood determination and, when the lender requires it, the condo questionnaire or project review fee, which associations and management companies commonly bill at roughly $150 to $400 and more for a rush. Section C (services you can shop for) carries title and settlement charges. Section H (other) is where HOA transfer fees, the estoppel or resale certificate, a capital contribution to the association and prorated dues appear, often on the seller’s side of the Closing Disclosure depending on the contract.
What the tolerance rules protect, and what they leave open
Lender charges and Section B fees cannot increase at all between the Loan Estimate and the Closing Disclosure without a valid changed circumstance; recording fees and Section C services chosen from the lender’s list may rise 10% in aggregate. Prepaid interest, homeowners insurance, property taxes and anything paid to the association are in the unlimited category — the estimate must be made in good faith, but a transfer fee the HOA doubles in March will not be refunded by the lender. The questionnaire fee is the usual fight: if the lender ordered it, it is a loan cost subject to tolerance even when you paid the management company directly before closing, and it should show as paid outside closing rather than vanish from the forms.
Timelines, and the one that is missing
The Loan Estimate is due within three business days of an application — name, income, Social Security number, property address, estimated value and loan amount — and the Closing Disclosure must be received three business days before consummation, with a new three-day wait if the APR moves more than an eighth of a point, the product changes or a prepayment penalty is added. Because a second home is not your principal dwelling, there is no rescission period after signing: once the Closing Disclosure wait is over, the loan funds and the HOA clock starts. The changed-circumstance rule matters most when the project review fails: moving from an agency loan to a portfolio product is a product change, so the lender issues a revised Loan Estimate and the second-home LLPA or the non-warrantable premium reappears as points in Section A or as a higher rate. Review it against the original within the three-day window the rule gives you.
What to check
- Check page 1 for the HOA dues figure and compare it with the estoppel certificate — an understated number hides a DTI problem until underwriting.
- Find the condo questionnaire and appraisal fees in Section B; if the lender required the questionnaire, it cannot rise later.
- Ask whether HOA transfer, capital contribution and estoppel fees are on your side or the seller’s side of the Closing Disclosure, and match that to the contract.
- After a non-warrantable finding, demand a revised Loan Estimate showing the new product and pricing before agreeing to proceed.
Frequently asked questions
Can the condo questionnaire fee increase after the Loan Estimate?
When the lender requires the questionnaire, it is a service you cannot shop for and falls in the zero-tolerance group: the charge on the Closing Disclosure cannot exceed the estimate without a legitimate changed circumstance. If you chose to order documents from the HOA on your own initiative, the lender treats them differently, so clarify at application who orders what.
Why did my second-home Loan Estimate change after the project review?
A project that fails agency review forces a switch to a portfolio or non-QM product, which counts as a changed circumstance under TRID. The lender may reissue the Loan Estimate with new points, rate and fees within three business days of learning the facts. Compare the revised form with the original and ask what else would bring the agency pricing back, such as more down payment or a full review.
The rule in full: TRID: the Loan Estimate and Closing Disclosure. The borrower profile: Condo and second-home buyers. Related guides: Conventional loans for condos and second homes: the extra rules · PMI removal: the 80% request, the 78% automatic cancellation, and the appraisal route · Closing costs explained: what is negotiable, what is not · Pre-approval vs pre-qualification: what sellers actually respect.
Other federal rules for condo and second-home buyers
TILA / Reg Z · RESPA · ECOA · Fair Housing Act · HMDA · SAFE Act / NMLS · ATR / QM · HOEPA · HPA / PMI · Servicing rules · FCRA · Flood insurance · MARS rule · SCRA · LO compensation
TRID disclosures for other borrowers
First-time buyers · Conventional borrowers · Veterans · Self-employed · Investors · Retirees · Bad credit · Foreign nationals · Physicians · Heroes · Rural buyers · Refinancing