Can a buyer get an FHA on a Condo that is 6% in arrears collecting the HOA Dues

If a Condo complex has had a few short sales and/or REOs and is 6-8% behind in collection the HOA dues, will those issues prevent a buyer from obtaining a FHA loan?

Complex is in great condition and has kept up with capitol improvements
  • February 12 2010 - Foster City
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Answers (3)

Profile picture for Texas Banker
8% deliquincy should not be a problem, however the homeowner to investor ratio is also important.

Make sure the condo project is HUD approved. 
  • February 13 2010
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Profile picture for Bentley Advisors
Do you mean that there are 6-8% of homeowners that are delinquent on HOA dues within the complex?  If so, you should be fine.  I believe that they will allow a maximum delinquency rate of 15% of total units. Although, I don't deal w/ FHA loans at the moment, I can refer you to an excellent LO at BofA.  Let me know.  Happy to do so.
  • February 13 2010
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It very well could. Per the HUD guidelines those dues are not only supposed to be up to date but the Condo Association is supposed to be holding a buffer for just this reason. I would contact the Condo association to see whether or not they still have a buffer or any plan to remedy the situation in the mean time. It will then come down to underwriters discretion assuming the complex has not lost approval. Good Luck!
  • February 12 2010
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