A buyer who was about to sign a condo contract in Tenafly faced a setback just before loan approval. Despite having no issues with credit score or income, the bank requested additional documents after reviewing the HOA financial statements of the building. In summary, there are three main points to check.

The first is the level of the HOA fees themselves. In Bergen County, where Tenafly is located, condo HOA fees range widely from $200 to over $800 per month depending on the building, with the overall average in New Jersey being $423 per month according to hoacosts.com. Typically, HOA fees cover exterior maintenance, master insurance, common area management, landscaping, trash collection, some utilities, and reserves.

The second is the status of the reserves, or reserve funds. New Jersey's S-3992 law, effective August 21, 2025, mandates that condo and co-op associations have a reserve study conducted by a licensed engineer or certified reserve specialist, requiring baseline funding standards that ensure reserves do not fall into the negative within 30 years. Existing associations are granted a 5-year grace period to meet this standard.

The third is the delinquency rate and any ongoing lawsuits. Mortgage lenders review the HOA's delinquency rate, reserve fund ratio, ongoing lawsuits, and commercial space ratio during the condo purchase assessment. If a project does not meet the standards set by fanniemae.com, it may be classified as a non-warrantable condo, leading to loan denial or stricter conditions.

Tenafly itself is an area where condos and townhomes make up a relatively small portion of the single-family home market. Due to the lack of large complexes, there can be significant variations in the financial status of HOAs for different listings, making it even more important to verify financial statements before signing a contract.

If loan processing is delayed, the entire closing schedule can be pushed back, and there may be situations where renegotiation with the seller is necessary. Asking the loan officer whether the building has a history of being classified as a non-warrantable condo before signing the contract can save time.

For families moving from out of state to New Jersey, it's important to consider property tax burdens in addition to HOA fees. New Jersey is often mentioned as having one of the highest property tax rates in the nation, so judging monthly expenses based solely on the sale price and HOA fees may lead to discrepancies with actual expenditures.

In areas like Tenafly, where large condo complexes are rare, smaller associations may result in a higher burden per individual unit. Buildings with fewer units have fewer owners to share the costs when major repairs arise, leading to relatively larger special assessments per unit, making it even more crucial to check financial statements for smaller buildings.

If major repairs like roofing or plumbing are needed while reserves are low, special assessments may be imposed suddenly, which can negatively impact loan assessments. Requesting recent meeting minutes and budget proposals before signing the contract can be beneficial.

Tenafly is a location that Korean families consistently seek due to its school district. However, while school ratings can be referenced through GreatSchools or Niche, boundaries often change, so it's advisable to verify the schools assigned to a specific address before purchasing.

• HOA financial statements and recent reserve study results
• Delinquency rates and any ongoing or planned lawsuits
• History of special assessments within the last 3 years
• CC&R regulations regarding rental restrictions, pets, etc.

Remember that banks assess not only individual credit but also the overall financial health of the building, allowing you to prepare necessary documents from the start of the contract process. This article is not investment or legal advice, and it is recommended to consult a real estate professional before finalizing any contracts.