Issues that matter to the investors, from what I learned on a recent transaction similar to yours, is whether or not the HOA and Condo Association have adequate insurance, and whether or not they have adequate financial reserves to back their obligations under the Covenants and Restrictions. The place my buyer was trying to buy was in an association that had recently suffered a serious fire in one wing, and three or four units had been destroyed. OK, that's what insurance is supposed to take care of, right?
ONLY if you are ADEQUATELY insured - and this Condo Association wasn't - that means no benefits or significantly reduced benefits. The only way they could rebuild was to make a Special Assessment of all the rest of the owners, with a requirement that it be paid within the next 60 days.
In that situation, if my buyer had already been an owner there you should think about where the bank would end up if 1) her unit had been destroyed (the bank's collateral), or 2) she had been a recipient of the Special Assessment that she couldn't afford, so she decides to sell. Now she is trying to sell a unit at an increased price to cover the assessment due. Nobody would buy into that mess, so her bank would be left holding a piece of collateral that had significantly DEPRECIATED in value.
I got a real lesson on that one - my lady decided she really did want to buy if there was any way, so her lender was able to put it together - BUT - she had to put 20% down, and they were able to hold it "in house".
It may hard to believe this, but your lender (and their investors) are really trying to protect YOU by being so cautious. They know all the issues that have developed with these types of loans, and how both they and their borrowers come out losing. If they ultimately say NO - think twice before you proceed trying to figure out how to hold the deal together.
Best of Luck!