Dissolved HOA, Now Property is "Non-Warrantable"?

[Meredith Pacifico]

We're looking at one side of a duplex on a street that once had an HOA, but it has dissolved. The unit was under contract but it fell through because the buyer's bank/financing said the unit was non-warrantable and therefore hiked the interest rate up. My mortgage broker has not heard of this being an issue so long as the unit is insurable. Our realtor had never heard of the term before, either. Has anyone here ever dealt with an issue like this?