Condo assoc needs to be approved by lender?

[Barbbill]

I was told by my lender that the bank must approve the condo before can consider lending....I then heard that if you are putting 20% or more down the bank doesn't need to approve the condo association

[StartingOver10]

Yes, the bank needs to aprove the condo before lending on the unit. Some condo communities are not warrantable. A warrantable condominium is one that meets the guidelines set by Fannie Mae and Freddie Mac so the loan can be delivered to either Fannie or Freddie after it is issued.

In addition to the lender setting guidelines, if you do borrow more than 80% the PMI companies have guidelines as well.

The guidelines include many things including a limitation of the number of investors that own in the community; the amount of reserves required to be collected on an annual basis by the condo association, number of foreclosures present in the community. There are additional items. Speak to your lender to find out what the requirements are - you may decide that if the condo doesn't meet those requirements, you may not want to purchase there either.

[HoldingOntoHope]

I agree with the above completely. The requirements are for the protection of their money but they protect you too. If there are problems then the property values can nosedive quickly. No guarantee on the long term future but at least if it is in good shape now you might have a shot at getting out if it starts to go south later.

I am in an HOA community. I plan to stay there long term, but if things go bad you can bet I will bail rather than ride it all the way to the bottom.