[Tide81]

So my offer on a condo was accepted, but it turns out there is litigation with the company that did the conversion. Even though all the listings for units there say FHA/CA/Conv/Cash, my agent says no place will actually loan any money for a complex under litigation.(I prequaled for a conventional loan, 20% down). My agent said he called several lenders and they all said the same thing, no loan.
I know I should probably just trust my agent, but I cant help wanting to get a second opinion.
If a complex has ongoing litigation like this should I just stay away period, even if I could have gotten a loan?[

[airics]

where is this complex? on Flamingo?

[Tide81]

Isla at Southshores, near West Lake Mead and North Buffalo.

[flyingtigers]

Believe it....I went through the same thing a year ago.

[redwhale]

FHA Approved Condo Website I found this useful.

[Daddys///M3]

Originally Posted by Tide81

So my offer on a condo was accepted, but it turns out there is litigation with the company that did the conversion. Even though all the listings for units there say FHA/CA/Conv/Cash, my agent says no place will actually loan any money for a complex under litigation.(I prequaled for a conventional loan, 20% down). My agent said he called several lenders and they all said the same thing, no loan.
I know I should probably just trust my agent, but I cant help wanting to get a second opinion.
If a complex has ongoing litigation like this should I just stay away period, even if I could have gotten a loan?[

Your agent speaks the truth. Unfortunately because of the shape of the condo market there is not even a FNMA/FHLMC (conventional GSE's) approved condo list anymore. Every investor is looking at every deal individually, and unfortunately the litigation is not the last of your concerns. For example, has control of the association been turned over to the unit owners? Does the condo have common areas leased to or by the HOA? Will the HOA waive it's first right of refusal? Are more than 15% of the units delinquent on their HOA dues by 30 days or more? Does the HOA maintain a master insurance policy that covers all general and limited common elements with 100% replacement costs, less than 5% of face amount of policy deductible, general liability coverage of $1,000,000, and a fidelity bond equal to the amount of all units monthly assessed HOA dues times 3 months?

Granted that is just one lender's condo eligibility list (excluding of course the litigation issue that you are already aware of), but in this business once someone does it, everyone does it (which is why mortgage insurance for conventional mortgages has all but dissappeared).

As an aside, I would probably stay away from conversions altogether. The likelihood for problems is higher than with purpose built condos. At least that is what I have been told.

[Daddys///M3]

Originally Posted by redwhale

FHA Approved Condo Website I found this useful.

That can be very useful but litigation kills FHA insured mortgages on condos as well.

[nwlv]

Rock Springs is marked as approved on that site. I think you would have a tough time getting a loan in there, right now. How about it Daddy?

[Daddys///M3]

Originally Posted by nwlv

Rock Springs is marked as approved on that site. I think you would have a tough time getting a loan in there, right now. How about it Daddy?

There are quite a few Rock Springs approved on that site. Unfortunately I could not answer your question without an HOA questionnaire. However, if it is FHA approved, owner occupancy rate is greater than 51%, and there is no existing litigation then it would qualify for FHA financing. I can't comment on conventional financing per the lack of a FNMA/FHLMC approved condo list as I mentioned in my previous post. If you want conventional financing on a condo then you will have to roll the dice, pay for the condo cert, and see if the lender approves the project.

[stephenp]

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