Condo foreclosure - Tampa

[Aaron Vargas]

My wife and I recently moved to Tampa and have our eyes on a condo that is bank owned.

We’re very interested in the condo, but we’re not sure what the process is like for a property that was foreclosed on. Are cash offers the only way in the door for bank owned properties? Or will there be a chance to get financing?

[Tom Parris]

Hi Aaron,

Depends on what you want to put down and what your intentions with the property are. A big reason why single family homes cannot get financing is because of their inability to get insurnace. Insurance companies are want a 4-point inspection on homes older than 30 years old. Those 4 points are AC, Roof, Plumbing and electrical. If they inspection comes back in good shape, you can get a reasonable insurnace premium and close.

Since “condominium” is a definition of ownership rather than a property style is where the financing issues comes into play. With a condo, you own from drywall in, and the exterior and common areas are maintained by the association. With that being said they can impose something called special assessments on to all the owners to repair or replace a community item that wasn’t budgeted for. That assessment can be large or small, but it’s another fee that can cause people to not be able to afford their mortgage. So if there are a lot of foreclosures and short sales in that community, you have a sign. 

To know if you can get financing, you have to answer a couple questions about the community. Is there any litigation? Are they saving 10% of their income towards the reserves? What’s the delinquency rate? What’s the renter to owner ratio? 
The answers to those questions will determine if the condo can get financing, or if you can put a lower amount down to get the financing. If you’re planning on living there, you can get down to 5% down. 

Hope that helps