Regardless of the property you are trying to finance, every property can have certain challenges. When purchasing a condominium understand that although you will be the owner of one unit you will be the steward of the entire building along with a couple or several other owners. This can create unique challenges. Some of the things that can create hurdles in financing a condominium would be one owner owning more than 10% of all the units. This would allow one owner to possibly have most of the voting rights in the homeowner’s association (HOA) which a lender will generally have an issue with.
Other items of concern to a lender would be if there is a current lawsuit against the association and likewise if the HOA is suing another entity such as the original developer for construction defects. These litigious actions can prevent lenders from providing financing on these properties. It also can provide an opportunity for a buyer who can obtain financing during these turbulent times because at some point these situations will be resolved and this can have a positive impact on the value of the property. These are just a few of the items that can impact on your financing of this type of property. Sometimes the borrower may be perfect, but the property may not be and this can impact the down payment requirements, type of loan, interest rate and cost of the loan.
Call us today to discuss your options.