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First Time B…, Home Buyer in Temple City, CA

Condo with HOA litigation

Asked by First Time Buyter, Temple City, CA Sat Mar 16, 2013

How difficult is it to get a mortgage for a condo that has a HOA litigation? Thanks!

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HOA projects are ineligible where the project is in dispute either by litigation, arbitration or mediation where the reason involves the safety, structural soundness or habitability of the project. If the reason is benign from a safety, habitability or structural soundness standpoint, that may be a green light. See web reference below for recent condo guideline changes from Fannie Mae.
1 vote Thank Flag Link Sat Mar 16, 2013
I can close a condo that is "unwarranted" The down payment requirements are greater and rate is higher.

What type of litigation? Copies of the ongoing litigation are available for a cost at the Superior Court.

A high percentage of condos in Orange County are currently Not FHA approved.

We offer an in house team that reviews and submits the "re-approval" to HUD or Fannie Mae and Freddie Mac.
The homeowner association would need to supply a list of documents.
Litigation is one reason why you can't get a government or conventional loan, but also since the down turn condo's have struggled to fund insurance and ameneties...
0 votes Thank Flag Link Tue Dec 17, 2013
There are a number of Lenders that offer financing for Condos in Litigation. Per others posts, it does depend on the nature of the Litigation, but it is available. BBVA Compass offers Financing for Non Warrantable Condos(including Condos in Litigation). Hope this helps. Please feel free to contact me with any more quesitons or info on Program.

Matt Brozek
Vice President-Mortgage Banking Officer
BBVA Compass
0 votes Thank Flag Link Fri Nov 22, 2013
30 year conventional loans are readily available for condos with HOA litigation
0 votes Thank Flag Link Thu Nov 21, 2013
It is challenging But doable we do offer lending for the condo project with litigation! We are at American select Funding specialized there and if you need detailed info you can contact me directly at 714 639 6694
Shab Kavandi
0 votes Thank Flag Link Thu Jul 11, 2013
Its difficult in mainstream lending, but available. I specialize in funding these loans and did over 10 mil in 2012. The type of litigation does not make a difference. You can google my name or HOA litigation condo loans to get to my site.
0 votes Thank Flag Link Thu May 30, 2013
There are limited property on the market. I am highly recommending to buy any possible properties come in the market. If there is a HOA litigation, it will be additional assesment which will not cost you very much per month! That will not effect getting mortgage. I had a open house on a Irvine Condo yesterday. I had 30 families attended in 3 hours with several offers. It is best to buy any properties now. You welcome to call Shane Etemad at 949-400-4677, if you have other questions.
0 votes Thank Flag Link Mon Mar 18, 2013
Almost every condo HOA has ongoing litigation in CA. It depends on what the litigation pertains to. For example if it was a simple "slip and fall" and the damages look like they can be resolved, some lenders will lend anyway. If it's a soil / foundation / contruction issue the likelihood of getting any loan is almost non existent.
0 votes Thank Flag Link Sun Mar 17, 2013
The best advice get other property, condos with litigation are very difficult to finance unless you get private investor that does not follow Fannie Mae guidelines.


nmls 380933
0 votes Thank Flag Link Sun Mar 17, 2013
I have financing for a condo in litigation depending on what the litigation is. As Charles states, as long as the litigation has no impact on the safety, structural soundness, habitability, or functional use of the project you can get financing.
Web Reference: http://WeFixRates.Com
0 votes Thank Flag Link Sat Mar 16, 2013
Knowing that the lenders are now extra-careful, one would think that it's nNearly if not impossible to get a loan on a condo where the complex is in litigation. In many cases condos in such situations are listed as "cash only".

Most lenders will stay away from condo complexes with pending litigation, regardless of whether it's the HOA filing, or the suit is against the HOA. If not immediately disclosed, the lender will require that the HOA complete a questionnaire. If there is a pending litigation, that stops the lending process.

If you're looking to buy, this is a question you should ask your lender first before you write an offer. And if you're getting an FHA loan, you should also ask the lender to determine if the the complex is FHA-approved.

Good luck.
0 votes Thank Flag Link Sat Mar 16, 2013
tough! most lenders req condo certification which involves a list of questions on litigation, rental vs owner-occupied ratio, delinquency, etc. only a handful of lenders don't ask for condo cert.
0 votes Thank Flag Link Sat Mar 16, 2013
I'm sure you've already worked through this because a number of months have gone by since you asked the question, but I'll provide my input in case you find it helpful.

Lenders generally don't ask for a condo cert if the buyer is putting 25% or more down. Lending standards seem to be ever changing, so it's important to speak with a trusted lender to get the most up to date information.
Flag Mon Dec 2, 2013
Would you know what kind of lender won't ask for condo cert? We found out that the litigation was about an owner suing the HOA for rat infestation in his property. Thanks!
Flag Sat Apr 13, 2013
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