flood question on condo

just got a call from a Realtor friend of mine.   She has a friend who is selling a condo in West Covina, CA. According to the flood cert, it is in a 100 year flood plane. The seller has an individual flood insurance policy in place and the buyer is willing to obtain one as well. The appraisal mentions that the propery is in a flood zone as well.
 
The buyer is trying to get their financing through BofA and they conditioned for having the entire complex get a master flood insurance policy, which the HOA is not willing to do. BofA won't accept the buyer getting an individual policy.

I know the rules on flood insurance have tightened recently, but does anybody have any ideas about how to make this deal work?   On one hand, I would think that the lender is protected as long as the new buyer havs a flood insurance policy covering the subject unit. On the other hand, I could see the lender being concerned about the marketability of the property in the event that there was a flood and other units were damaged without having an individual flood policy.   IE: there are damaged units in the complex without flood insurance which would drag down the value of the other units that do.

Anybody have any ideas?    
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December 18 2013 - West Covina
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Answers (4)

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I've had this happen to me time and again in my area.  If the complex is in a flood zone, then the complex needs to be properly insured.  
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December 18 2013
I have never heard of a condo owner having a flood policy for just them. It would not cover much since the condo owner only owns paint to paint in the unit and not the outside. If it is not on the ground level the water would have to rise a lot to get up to her unit. I am surprised there is not a master policy on the condo, I bet they will have to get one someday or none of the owners are going to be able to sell easily.

tim
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December 18 2013
seller can't carry back, she barely has enough equity to sell this without it being a short sale.
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December 18 2013
Has buyer checked with different lenders?  BofA is usually difficult to work with anyway.  I would try a smaller bank personally.  Is seller able to carry back?
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December 18 2013
 
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