The number of loan defaults on Florida condos has made most (if not all) lenders nervous about partnering with buyers on condo purchases. It can be tough to get any type of loan on certain condominiums, no matter how much the buyer offers to bring to the table. The financial health of the condo association, history of sales in the building, and age of the building, all have a bearing on whether a certain condominium will qualify for a loan. The borrower may have excellent credit, great income, low debt, and be an all-around quality person, but if the building has too much risk-good luck getting a loan.
But there are many Tampa condos that are in good financial shape (relatively speaking) and have no problems qualifying for loans, even FHA insured loans. Others, not so much.
Below are just some of the questions included on one major lender’s Condo Questionnaire.
1. Are all common elements and/or facilities substantially complete?
If no, are all common elements and/or recreational facilities associated with the subject phase complete?
2. Is the project subject to additional phasing and add-ons?
If yes, number of additional phases and units to be built: Phases: Units:
3. Is the project a conversion of an existing building? If yes, year converted:
4. Date control of the HOA transferred from the developer to unit owners?
5. Date when first units made available for sale?
6. Total number of units?
7. Number of residential units sold and closed?
8. Number of units under contract?
9. Number of units rented or investor loans?
10. Number of sales in last 90 days?
11. Does any one person or entity own more than one unit? If yes, list how many each own:
12. How many units are over 30 days delinquent?
13. Are there any pending special assessments?
14. Is the HOA involved in any litigation, mediation, arbitration or other dispute resolution process?
15. Are there any adverse environmental factors affecting the project as a whole or as individual units?
16. Does the owner’s association have a reserve fund separate from the operating account?
If yes, is it adequate to prevent deferred maintenance? Current amount in fund?
17. Total income budget for this year? Total Reserves budgeted for the year?
18. Do the project legal documents include any restrictions on sale which would limit the free transferability of title?
(i.e. Age Restrictions, First Right of Refusal, other deed/income restrictions)
19. Is the unit part of a legally established condominium project, in which common areas are
owned jointly by unit owners?
20. Are the units owned in fee simple or leasehold?
21. Are the amenities/recreational facilities owned by the HOA?
22. If a unit is taken over in foreclosure or deed-in-lieu, is the mortgagee responsible for delinquent HOA dues?
If yes, are they responsible for 0-6 months or 7 + months?
23. Does the property operate as a resort hotel; renting units on a daily basis?
24. Is any part of the project used for commercial purposes? If yes, what percentage of square footage? %
25 Do the project legal documents or local zoning limit the amount of time the owner can live in their unit?
26. HOA is named insured on master insurance policy?
27. Are common elements/limited common elements insured to 100% replacement cost?
28. Coverage $ Deductible $ Expiration date:
29. Are units or common improvements located in a flood zone?
If yes, is flood insurance in force?
Does this cover at least 100% replacement?
Or, is this the coverage maximum available per condominium federal flood program?
30. Is the HOA insured for general liability? If yes, amount per occurrence $
31. Does the HOA provide hazard insurance coverage for the interior (walls-in) of the condominium unit?
32. Is the HOA insured for Fidelity Bond? If yes, amount $
Amount carried by management Co.?
33. Minimum number of days required for written notification to be given to HOA or insurance trustee before any substantial
changes or cancellation of the project coverage?
So if you’re in the market for a Tampa condo, hopefully you’re not wasting your time browsing for and inquiring about condos that just can’t qaulify for your type of financing, or ANY type of financing!
Better yet, get a professional on your side.
Considering a Tampa condo purchase? Give us a call 813-421-1895
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