Resale of Condo with no HOA in Place

I’m looking at some great foreclosed properties in Chicago. I will buy the units and resale them to end-buyers (retail customers that will live in them).

Many units in the buildings themselves have foreclosed so the HOAs either have debt or doesn’t exist.

I want to know if lenders/ underwriters see no HOA in place or HOA with debt as a red flag or issue and would be unwilling to finance my end-buyers because of it. Does anyone have any experience or insight on this?

Thanks.

Herman

no HOA should not be a major problem but chances are your buyer will need to show proof of a current insurance policy for the building

Actually it may be more trouble than that. Most of the time lenders need information on the common areas, and owner occupant/investor ratios and things like that. They usually get that from the HOA. So while it may not be a deal killer it will definitely put more work in your lap.