Simply stated, most banks see the neighborhood as a high risk investment if the current owners are not paying their HOA dues or if the majority of the units are rented and not owner occupied. They do not want to loan buyers the money to buy a home in these areas. The presumption is that it's very likely the units not being cared for and maintained because of either financial difficulties or because they're tenants who do not (normally) have the same vested interest in the property. FHA has established an "approval" system for HOA and condo communities. If a community does not meet their approval, they will not back the loan. If FHA won't back it, most other banks follow suit and won't either.