Homeowner’s Associations are becoming a more contributing factor in the Short Sale Resale market. As the number of vacant properties increases so does the Homeowners delinquency fees, less homeowner’s to contribute to the Homeowner’s Association’s Dues. In the situation of a condo, one of the primary and most predominate factors a financeer will look into is the occupancy rate and status of the current Homeowner’s Association’s financials. Most financing institutions will not finance if the condominium complex has less than 50% occupancy rate. Furthermore, if the percentage of that ownership is primarily non-owner occupied, that can present an even larger problem.
In this current situation, we’ve had a condominium on the market for over 8 months. Initially the condos were FHA approved for financing. As we moved forward and the banks prolonged the approval process, they were no longer FHA approved due to occupancy levels. As we’ve progressed the current HOA is notating the occupancy rate below 50%. CONVENTIONAL FINANCING IS NOT ALLOWED IN A COMMUNITY WHEN THE OCCUPANCY RATE IS BELOW 50%. On top of that, the bank that we are negotiating the short sale with will not reduce selling price, to take into consideration the fact that we are in a market that has been limited to cash only or hard money purchasers. We will continue to work on the banks and educate them on the current market conditions. Do you know the current status of your Homeowner’s Association? Are they financially stable? Are you considering purchasing a home with a Homeowner’s Association? What is their financial standing?
Want more information? Free Home Evaluation? Call Jennifer (916) 230-3880 or email JenKleinSac@gmail.com