Non-warrantable condo - Need advice

[Greg Campbell]

BP Community,

My wife and I are in the process of buying an investment property on the beach in the OBX, NC.  We have gone through the entire loan process to find out yesterday that there is some language in the condo association by-laws that allow the condos to be time shared.  We are still trying to uncover why this is still on the by-laws as not one unit is used as a timeshare and the current property management didn't even know it was there.

As we are still uncovering information about this situation, I don't have all the details.  I would like to know what feedback the BP community has on non-warrantable condo as I'm starting to get cold feet but at the same time, if we want to get this done, we need to move fast to find another lender.

[Colleen F.]

I think the HOA will be stuck with this defect on all future sales now that it has been uncovered. Does your lawyer have any advice? Is this an item that is open for legal interpretation? I have taken what they called in-house loans for I assume similar reasons using a direct local lender. They want more down because they couldn't sell the loan. If this is a short term issue on an investment property that the HOA will fix then you could also consider hard money and using delayed financing for a conventional loan once this is fixed. However HOAs are notoriously slow and I have little concept of how long this would take to fix. Has the HOA addressed it with their lawyer?

Non -warrantable means it can't be sold to Frannie or Freddie Mac.