Any lenders for condos with HOA litigation?

[Ethan S.]

Hello,

I recently purchased a condo with cash and am looking for a lender for Sacramento area. HOA is in litigation with the builder for the common area.

Thank you. 

[Stephanie Medellin]

@Account Closed  I work with lenders that will lend on condos in minor litigation according to Fannie Mae guidelines, but I suppose that would depend on whether the manufacturing defects have already been repaired and they are just trying to recoup money?

This is the general guideline:

Construction defect litigation in which the HOA is the plaintiff are not considered a minor matter unless the HOA is seeking recovery of funds for issues that have already been remediated, repaired, or replaced. In addition, there is no anticipated material adverse impact to the HOA if the funds are not recovered.

Otherwise most non-warrantable condo loans won't go too high on LTV because of the added risk.