how does financial condition of a HOA affects getting Mortgage ?

[Jhonny Paulino]

Is the financial condition of the Homeowner Association (HOA) of a condominium taking into account for a conventional mortgage as an investor?

Hello BP.. I’m looking for advice on the following issue.

Right now I have a condominium under contract for 86k, the seller agreed to carry a second note for 25k for a year and the rest of the money is coming from a HML loan (60K) at 12% interest for a year. The ideal plan is to complete the repairs in the condo, find a tenant to rent the property and do a refinancing in 6 to 9 months to pay out the HML loan and the second note of the owner.

Currently we are having a difficult time obtaining all the disclosure forms from the HOA and after further looking into the issue we discovered that the HOA although is "operational" in terms of collecting the condo fees, cleaning the common areas, etc.they are not following all the legal formality of a HOA in regards of being incorporated, filling all the paperwork with the state. Etc. it appears with the housing crisis of few years ago they fired the management company.

Now my question is if the HOA situation will prevent me or make it more difficult to obtain long term financing in 6 to 9 months.? I don't want to be in stuck in 6 months with the HML loan because I can't obtain a conventional loan due to the lack of legal organization of the HOA or the financial situation of HOA. I know that high delinquency is an issue for FHA loan but that's only for owner occupied.

I'm currently contemplating withdrawing my offer and walking away from this deal because of the situation of the HOA.