Return to the Buying and Selling Homes Forum | Post a Follow-Up

 o
Difficulty getting loan for foreclosed condo with no HOA

Posted by cscow (My Page) on
Wed, Aug 8, 12 at 12:12

We are in the process of purchasing a foreclosed condo which is a second home/ vacation property for us. The condo development is 8 units and the development was foreclosed by the builder. All of the units have been sold and we purchased the last one. To date, the bank is still in charge of the HOA and the homeowners have not taken over. Due to the fact that there is no current HOA in place, we are unable to get a conventional loan and have to get financing through a local bank that is a balloon with a high interest rate and high closing costs. Has anyone else been in this situation? Any suggestions or are our hands tied? We are hoping to refinance once the HOA is established, but then we have to pay closing costs again.


Follow-Up Postings:

 o
RE: Difficulty getting loan for foreclosed condo with no HOA

You probably won't like this, but my suggestion is to not buy a condo in that situation. The major banks won't lend to you because you are exposing yourself to completely unknown and possibly massive future costs. Any deferred maintenance, big bills etc are going to get passed on to the new condo owners once that association is up and running.


 o
RE: Difficulty getting loan for foreclosed condo with no HOA

Run the other way.


 o
RE: Difficulty getting loan for foreclosed condo with no HOA

Thank you for your responses. The condos are brand new and appear to be maintained. I am going to have the realtor check if there are any outstanding maintenance costs lingering that could be passes on to the homeowners.


 o
RE: Difficulty getting loan for foreclosed condo with no HOA

I would suggest you have a lawyer review this situation, beside the realtor.


 o
RE: Difficulty getting loan for foreclosed condo with no HOA

There is a bunch of stuff even an attorney will not be able to discover, especially with the builder still being involved.

Find another place.


 o
RE: Difficulty getting loan for foreclosed condo with no HOA

This is such a bad idea on so many levels.

Don't get stubborn here because you've already become sentimentally attached to this place. Look at this objectively. There are more similar fish in the sea for which you will be able to get a reasonable mortgage approved. Move along to something better. It IS out there.


 o
RE: Difficulty getting loan for foreclosed condo with no HOA

See if the builder will rent the unit to you for 6 to 12 months, with the option to purchase once issues get resolved.


 o
RE: Difficulty getting loan for foreclosed condo with no HOA

Are all Condos a bad investment or just one in the described situation? Also, if we obtain a 6(d) certificate (certificate of no outstanding common charges) from the bank will we be protected from the hidden costs mentioned above? I do not think the bank will rent to us as they have back up offers on the unit. I know that Fannie May had tightened up its rules on lending for condos. Has this impacted resale for anyone?


 o
RE: Difficulty getting loan for foreclosed condo with no HOA

Are all Condos a bad investment or just one in the described situation? Also, if we obtain a 6(d) certificate (certificate of no outstanding common charges) from the bank will we be protected from the hidden costs mentioned above? I do not think the bank will rent to us as they have back up offers on the unit. I know that Fannie May had tightened up its rules on lending for condos. Has this impacted resale for anyone?


 o
RE: Difficulty getting loan for foreclosed condo with no HOA

"Are all Condos a bad investment"

Often.

They can be adequate residences, but just about anything single family goes up faster.

You cannot even get a mortgage in many cases if there are more than X% rentals in the condo.

That should be a tip off.


 o
RE: Difficulty getting loan for foreclosed condo with no HOA

Is condo in FL? Or high risk area?

You must consider if you have difficulty now whether the same challenges will surface in the future?
Also, have you confirmed insurance HOA 6 I think as many lenders require it and if you are unable to get it you will be stuk with high price mortgage and get stuck with that lender?
Possible to talk or share with other owners on their situations?


 o Post a Follow-Up

Please Note: Only registered members are able to post messages to this forum.

    If you are a member, please log in.

    If you aren't yet a member, join now!


Return to the Buying and Selling Homes Forum

Information about Posting

  • You must be logged in to post a message. Once you are logged in, a posting window will appear at the bottom of the messages. If you are not a member, please register for an account.
  • Please review our Rules of Play before posting.
  • Posting is a two-step process. Once you have composed your message, you will be taken to the preview page. You will then have a chance to review your post, make changes and upload photos.
  • After posting your message, you may need to refresh the forum page in order to see it.
  • Before posting copyrighted material, please read about Copyright and Fair Use.
  • We have a strict no-advertising policy!
  • If you would like to practice posting or uploading photos, please visit our Test forum.
  • If you need assistance, please Contact Us and we will be happy to help.


Learn more about in-text links on this page here