The perfect condo with the worst HOA
I work for a mortgage company and was in process to purchase a condo that I've been renting currently. The condo is in PRIME location close to the redevelopment of the downtown area. The appraisal came in 20k higher than the asking price and will be worth a lot more in a few years due to the development of the neighborhood. 30% of the Units in the HOA are 60+ days delinquent on HOA Dues. The monthly dues are $235. The condo questionnaire indicated that the total past due amount is $-74k. I've obtained a copy of the budget and the HOA is profitable at the end of the year. My lender told me the Fannie guideline on delinquent HOA dues is 15%. Originally I was putting down 3% and minimum closing cost. To proceed I will have to put down 10% and looking at $18k in closing cost. I'm torn because it's a great investment in a developing neighborhood but I don't want the fact the HOA is behind in dues to bite me in the butt. Should I seek other financing and put less money down to be as liquid as possible or should I buckle down and pull money from my 401k and put the 10% down? Or should I stay away from the property b/c of the HOA issues? Thank you