We are having issues with Condos. First, there are no more “Spot Approvals” allowed for FHA financing, so FHA is NOT allowed unless the entire complex is “FHA APPROVED”. But now that we are shifting to Conventional Financing, we are having issues with HOAs.
Almost all lenders require the HOA to certify that NO more than 15% of the units are behind 30 days or more with their HOA dues. Many HOAs cannot due this right now b/c so many Condos are in foreclosure, or are bank-owned.
Solution: Put down 20% and get a “LIMITED APPROVAL” from DU (Fannie Mae Automated Desktop Underwriter). Such LIMITED APPROVALS do not require CONDO CERTIFICATIONS at many lenders, and we can therefore ignore HOA issues altogether. Caveat: Condos still must not have litigation issues, and more than 10% of the units cannot be owned by one entity.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167