I should note, this assessment is not for updating appliances or normal wear and tear. It's a complete reconstruction of the building exterior due to faulty work done by the original contractor (poor weatherproofing).
The cost of the assessment is not a deduction. It is an improvement that adds to your cost basis and is depreciated over 27.5 years, The same as if you made similar improvements to a freestanding house.
The interest on the loan is a deductible expense, but the principal payments are not.