Unable to get owner occupancy rate for condo complex refinance

[Craig Cude]

Hello BP family,

I am near closing on a substantial cash-out refi with my CA condo (single unit rental). The lender is at a road block with the Fannie Mae/Freddie Mac owner occupancy requirement that at least 50% of the project's units must be occupied as primary residences or as second homes.

My conundrum is this: for the underwriter, the appraiser's report does not match up with the property management questionnaire. The appraiser reports says of 90 units, 29 are rentals and 61 are owner-occupied. The PM doesn't provide as accurate of info, only stating that there are 57 of 90 "offsite-mailing addresses." Calling and writing the PM, there answer is a consistent, "we can't provide the number or rentals, only the number of on and off-site mailing addresses." What's crazy is that there a numerous "second homes" in this project where the owners obviously have offsite mailing addresses (Monterey, CA). The HOA president and board refuse to be contacted and only refer me to the PM. The lender has put the ball in my court while shrugging their shoulders.

Any ideas to how I can get an accurate answer to the number of rentals in the project in order to push the ball forward? I've been trying to get a hold of the appraiser to see how they came up with their (more helpful) numbers. One last note: Our HOA CC&Rs do require owners to submit Tenant Occupancy forms to the PM if we rent our units out (i.e., that's the only method of rental data collection I'm aware of, but the PM isn't willing to release those numbers). Thanks BP community!

[Craig Cude]

Thanks, Greg. Challenging them is what I've been doing, and I was actually making some progress with the HOA's PM in determining which owners had secondary homes in the complex. That's a work still in progress.

In the meantime, I started looking to other lenders to see if they send different questionnaires to the HOA. It turns out they do, and and the questions are worded differently! Once I told this to the original lender, his manager talked to their underwriters and they decided to just use the appraisal numbers. We close on the refinance this weekend! A lot of extra time (by me) was spent on this one, but I learned some good lessons. Happy to share more details with others.