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Just found out a few days before settlement on the sale of my house that most lenders will not lend funds to a buyer if the property they are purchasing is part of an HOA community where more than 15% of the properties are delinquent on their HOA dues.

Somehow the HOA is currently 40% delinquent! Also, around 52% of all the properties in my community are owned by one person or entity, which is another lender no no. I bought this house as a new construction so I had no idea any of this was going to happen.

Now my house is essentially unsellable unless I can find someone to buy it cash or someone who is willing to find a portfolio lender, which will require them to put down 10% plus pay a higher rate.

What's worse is my tenant moved out already and now I have to carry the mortgage.

I have an elderly neighbor who just retired and planned on selling her home soon. Now I have to break the news to her.

I feel that both the person/entity who owns 52% of the properties AND the HOA company should both be held responsible for this.

My question is, what are my options? Should I get lawyers involved? Does this sound like a class action lawsuit? Is there anything I can do?

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    Perhaps you can do what this page suggests: bankrate.com/finance/real-estate/…
    – Peter K.
    Commented Jan 23, 2015 at 13:37
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    Out of curiosity, how did you get to within a few days of settlement on the sale with these issues? Did the buyer's lender not check on these things earlier?
    – Craig W
    Commented Jan 23, 2015 at 14:32
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    HOA issues are the thing I fear most about buying a condo (or other association-governed property).
    – dg99
    Commented Jan 23, 2015 at 16:17
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    Why would the 52% owner be responsible for your problems? And HOA can't do much against delinquencies other than putting liens and threatening foreclosures, which won't make your unit any more sellable...
    – littleadv
    Commented Jan 23, 2015 at 16:52
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    Yet another reason never to buy a house/condo with a HOA.
    – jamesqf
    Commented Jan 23, 2015 at 19:30

1 Answer 1

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Unfortunately you answered your own question:

Now my house is essentially unsellable unless I can find someone to buy it cash or someone who is willing to find a portfolio lender, which will require them to put down 10% plus pay a higher rate.

Getting lawyers involved will cost you time and money and get little results because the offending owner(s) obviously don't care about following the law or paying their bills. Only other option I can think of is to try to get the HOA involved -- if they get serious about collecting they can get legal. That will take lots of time, but at least you don't have to (directly) foot the bill.

In the meantime, rent the place out again. Let any potential buyers know up front about needing a portfolio lender or paying cash.

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