Sarah and Michael have been looking for a new home for 3 months now. They finally found the perfect condo but then were told that the HOA was in litigation.
Condos are great starter homes for any family. There is a catch with condos though; most have a homeowner’s association and we sometimes find out that the HOA is in litigation. This is a red flag for lenders, especially when there are structural defects with the project. As a broker, we were able to shop around for Sarah and Michael and we found a lender that allowed condos in litigation, EVEN WITH structural defects! They were able to move in after the close of escrow with no delays.
Sarah and Michael’s story are pretty common now, especially with new developments. With this lender the rate is a little higher, +0.5-0.75%, but you will only need 20% down and gift funds are allowed. Once the litigation was resolved, they were able to refinance their home which helped lower their monthly payments.