Q & A With America's Real Estate Professor: Condo Approval
By Leonard Baron
Condo Purchase Cannot be Financed
Q. I’m trying to buy a condominium and my lender is saying that some of the projects I like are not approved for financing. Why aren’t some condo projects financeable and is there anything I can do to work around this issue. Melissa P. Yonkers, N.Y.
A. Major lending institutions have learned over the years that certain condominium projects have characteristics that lead the project to a higher risk of default. For example, if there is a lawsuit that the homeowner’s association (HOA) is involved in, that can lead to trouble for the owners and the HOA, and often more units in that type of project default on their mortgages and then the banks lose money because they have to foreclose.