(Also must be fog friendly) most HOAs don’t like viscous Golden Retrievers.

Is there a cap on the amount of late fees that can be assessed by a HOA?

I’ve been a realtor for several years and in HOA/Condo management currently.

You also get to keep the residential mortgage which has generally favorable terms right now and likely will not have a COA/HOA monthly fee which can eat up cash flow

First off, yeah your cashflow calculation is off, don't forget Property Tax, Insurance, Maintenance, HOA.

Build a Excel Spreedsheet and start analyzing properties, you will see that things like property tax, downpay size, ammortization period, interest rate, HOA and all those moving parts can effect a property.

One is his primary residence with a mortgage and the other was his old primary residence that has been vacant for about 1.5 years (100% paid off) but is still paying hoa fees.

There are 11 owners between 30 and 60 days late on their HOA dues, which causes the condo to be ineligible for a limited review mortgage. 

Located in downtown metro Phoenix that is undersupplied with condo property with reasonable HOA.

There are 7 owners between 30 and 60 days late on their HOA dues, which causes the condo to be ineligible for a limited review mortgage.