Found the perfect condo but there is a problem....

Asked by Justina Allen, Bloomfield, MI Wed May 30, 2012

I wanted to use an FHA loan for it but I have been running into issues with condo complexes either not being FHA approved or having their approval expire and not being renewed. But that was until I came across a condo that I fell in love with that is going for short sale that is in an FHA approved complex whose approval had expired. My offer had just been submitted when my Realtor discovered that from the management company handling the HOA that the builder left town and got foreclosed on his construction loans so the complex is bank owned and they don’t care enough to get lose ends tied up to complete it. So my Realtor withdraw my offer since it will be years before it will be FHA approved again.
Since then I have been approved for a conventional loan and am no longer relying on just the FHA loan and the condo is still on the market. Here is my question, if I were to purchase this unit could the bank that holds the lien on the complex come after the owners of the units in some way?

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Answers

4
Carole Higgi…, Agent, Suttons Bay, MI
Thu Jul 19, 2012
Well hopefully you have already purchased a home and are happily situated in it but I will answer this in case I can help other would be condo buyers. FHA and conventional mortgages have pretty much turned their back on the condo market. Even a conventional loan would not probably have allowed you to buy the condo you love(d) without a very high down payment (>20%)

The best vehicle for purchasing a condo, hands down is a bank portfolio loan. These are loans that are typically made by smaller state chartered banks and are held and serviced by the bank that made the loan- in essence held in their portfolio. Northwestern Bank is a great place to check in and Chemical Bank has some really great programs
Hope this is hopeful for the condo buying crowd
Carole & Greg
0 votes
Karen Paytas, Agent, Clinton Twp, MI
Wed May 30, 2012
Tina,

Good Evening!! Both Terri and Pam have given you the best advice to see where the complex stands. Legal questions need to be addressed to an attorney though since Realtors are not allowed to give legal advice.

Good Luck,

Karen Paytas, GRI, CMS
Realtor
Real Living Kee Realty
586-709-8465
kpaytas@mirealsource.com
0 votes
Pam Bava, Agent, Rochester, MI
Wed May 30, 2012
My first question is has anyone pulled the questionnaire from the Home Owners Association. This is something you will want to do right away. Some banks will not write a mortgage if the association is 10% or more deliquent in dues even if it is conventional. That document will have information for the lender if they do the mortgage. Do this first! You will have to pay the fee for it. Find out who the Property Management Company is and start the process.

Good luck
0 votes
Terri Vellios, Agent, Campbell, CA
Wed May 30, 2012
That is a good question to pose to your agent. You will need to read and understand the HOA documents. If the complex goes into litigation it could create a financing problem for conventional loans as well.

All the best to you.
Web Reference:  http://www.terrivellios.com
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