Condo Owners: Do you incur additional risk to admit a new co-owner to your Assn. with FHA financing?
A realtor is asking the co-owners of my condominium association to amend and/or waive certain provisions in rules so as to allow a new buyer with FHA financing to become a co-owner and member of our association. We will have a meeting about this shortly but I am curious what would be the additional risk we are being asked to take on to allow in a buyer with FHA financing via an amendment or waiver to our rules? My sense is that they could be marginal buyers credit-wise without the FHA financing and guarantee.
If they default on their mortgage payments, how quick will the FHA be to step in their shoes and make payment for them? Won’t that become a troubled loan / workout situation such that residual services like property insurance & maintenance fees may become compromised by non-payment from this new member, not able to pay their mortgage?
If your condo rules prohibited FHA backed owners, would you waive that rule to allow them to purchase your co-owned property?