Did You know that Freddie Mac will consider a condo development that is involved in litigation with a Builder or Developer??? It’s true!!!
We will consider it acceptable when the HOA as the PLAINTIFF (ONLY) is suing the Developer or Builder for reimbursement for expenses made to repair any project defects, safety and structural soundness and the repairs permanently resolved the issue.
The repairs also cannot have significantly impacted the HOA’s financial stability or future solvency.
The estimation of the known litigation amount cannot exceed 10% of the HOA’s funded reserves.
Some lenders are less specific and states that if the HOA is a party in a lawsuit that is related to structural or safety renders the development ineligible to them.
If you are purchasing a condo that has lending issues, reach out to us for help. More so, if you want to refinance your condo unit that has litigation, please reach out to speak to one of our loan officers who can help with financing.