So i was approved for financing with Wells fargo and 5 days before closing they say they will not approve the loan because the property HOA delinquency is too high. Do i find another bank to finance or take it as a sign that i shouldnt invest in this property. so confused?
My 2cents - do not invest in HOA community property, and if you do, make sure that they have an outstanding reserve study, no or very minimum delinquency and up to date maintenance. (CapEx maintenance schedule)
It's not a Wells Fargo issue, it's a FHA/conventional underwriting issue.
I manage 11 condo/coop/HOA associations in DC. I would shy away from most properties with high delinquency rates for a variety of reasons, namely that this often leads to other, deeper issues including special assessments, higher increases in condo fees, deferred maintenance, etc. That's not the case across the board and it may simply be an issue where the association isn't aggressive enough in collecting past due balances but I've found that not to be the case most of the time. I'd keep looking if I were in your shoes. Let me know if I can help with anything.
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