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Many homebuyers, when purchasing a condo will approach the purchase in a very similar way to a single family home. There are very important differences however to keep in mind.

Here are a few of them:

  1. You don’t own the lot. When buying an Arizona condo you own your unit and a percentage of the common areas. For example if there are 100 units in the Arizona condo you own 1/100th of the pool, grass areas, fitness center etc.
  2. Lenders are required to perform a condo review approval to determine if the project is healthy. By ensuring the project is healthy your investment as a buyer is protected. Here are general guidelines of the review.
    • More than 51 percent of the units in the project must be occupied by second home owners or primary reside
    • No one entity may own more than 10% of the units. There is an elevated risk to you as the borrower if the majority owner chose not to upkeep his units, stopped paying his HOA dues or had to foreclose. It is difficult get exceptions to this. To determine this simply go to and enter the main address (not unit number). It will show you the number of units and you can look to see if anyone’s name appears multiple times.
    • No more than 15 percent of the unit owners can be 30 days or more behind on their HOA dues.
    • The HOA must transfer 10% of the monthly revenue to a reserve account for large expenses. (i.e. new parking lot, roof etc.) If the HOA does not keep a strong reserve account they could issue a mandatory assessment for these types of projects.
  3. HOA’s will charge between $100 – $250 to provide this information to your lender. They complete a condo questionnaire form and can usually have this completed in 3-4 days. Borrowers will want to have a purchase contract in place before making this order.
  4. NOTE: We always have variances we can use for most of the above guidelines. Just because a condo does not meet all of the above doesn’t mean the HOA is not healthy.