NEED HELP: Finding insurance for a small condo complex

[Malick Ngom]

I am in the middle of a transaction where I am selling my condo, however I just found out our complex's insurance had changed recently and does not cover 100% of replacement costs due to a recent claim (last year). The buyer's lender requires this so we are at a standstill and I am worried about losing the buyer and having a hard time after if this is not fixed. Please refer to anyone that may have an insurance contact that may be able to help! :)

[Elias Halvorson]

Malick, 

Sorry to hear this. This is a major problem throughout the country. While I am not familiar with the CT market, the lender should have a list of real estate agents which provide gap coverage. Unfortunately, that won't matter as  Fannie Mae and Freddie Mac, the Government-Sponsored Enterprises (GSE’s) that set the guidelines for conventional loans, which most lenders follow for other types of loans, too, require that a condo building’s master hurricane insurance policy provide 100% coverage of the replacement value for the building. 

So, with that your buyer will likely have to go with a different route than a conventional loan which will likely require a higher down payment and have a higher interest rate. 

If it is a VA loan the buyer is doing it shouldn't be an issue and the lender can switch to Freedom Mortgage or another military-focused mortgage bank.