Question: A perfect client is putting 50% down on a condo. The lender says they need to approve the entire complex. What's up with that?

Answer: Because of the number of condominium foreclosures across the country, most conventional lenders are requesting a complete legal review of the complex. Last year, the lender would request a simple condo certification form to be filled out and signed by any representative of the home owners association.

Now Fannie Mae and Freddie Mac want a full-blown packet with all of the recorded HOA legal documents, as well as their budgets to be scrutinized either by an underwriter or a condo review specialist.

What are they looking for? These are the highlights:

1. Delinquent HOA dues. If the complex has over 15% of the condo owners past due, it may not qualify (Yikes! This one really hurts)

2.The budget must be reflect money in reserves for unexpected repairs

3.Any lawsuits that pertain to the building or structure.

Believe it or not, Fannie Mae does not have a guideline of primary residence to investor. But that is the holy grail of most banks. If the mix is more investor than primary, it could be a deal breaker.

FHA and VA are a little simpler, at least for today. As long as the condominium complex is listed on the HUD website as approved, you are good to go. Well, almost. The lender will still need to validate a 51% plus owner occupancy.

FYI: Home Owners Associations have been either unwilling or unable to supply the documentation lenders request even when a fee is involved. Agents may be required to get involved to provide muscle to lean on the HOA to make them understand the urgency of getting lender what they need.

P. S. If you are putting less than 20% down on a primary residence conventional loan, check with your lender to see if you can get mortgage insurance.

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Thank you.

Regards,

Sara McLlenan, Designated Broker
No Hard Sale Realty, LLC
www.NoHardSaleRealty.com