Chapter 14: Special situations
Most purchases run on the playbook in Chapters 1 through 13. Some run on the playbook plus a twist, and the twist is usually where the money hides. This chapter is six compact mini-guides: condos, new construction, co-buying, self-employment, buying from a distance, and buying in retirement. Skip straight to yours.
Condos and HOAs: underwrite the building too
When you buy a condo, you buy two things: your unit and a slice of a small business called the HOA (homeowners association), which collects monthly dues to run and repair everything you share: roof, elevators, pool, insurance on the structure. Dues of $400 a month are $4,800 a year of housing cost that never amortizes and never ends, so they belong in your Chapter 3 payment math from day one.
The bigger risk is the bill that is not monthly. A special assessment is a one-time charge levied on every owner when the building needs work its savings cannot cover; $15,000 per unit for a roof or $40,000 for structural repairs are not rare stories. Your defense is the reserve study, an engineer's report listing what will wear out, when, and whether the HOA is saving enough to pay for it. A building putting less than 10% of its budget into reserves fails Fannie Mae's own financing test, and that test has teeth: a non-warrantable condo (too many renters or investor owners, active litigation, one person owning a large share of units) cannot get a normal conventional loan, which shrinks your future buyer pool along with your financing options.
- Reserves under 10% of the budget, or reserves far below what the reserve study recommends.
- A special assessment in the last 3 years, or one being discussed in board minutes.
- Pending litigation involving the association.
- Mostly renters or investor owners; visible deferred maintenance in shared spaces.
- Dues that have not risen in years (cheap dues now usually means an assessment later).
Before offering on a condo, read the budget, the reserve study, and two years of board minutes. A cheap condo in a broke building is not cheap.
New construction: the model home is a costume
Builders sell a fantasy version of the product. The model home carries $60,000 of upgrades on a base-price sticker, so price the house you would actually order, line by line, before comparing it to anything resale.
The money twist is the builder's preferred lender. Builders commonly dangle $10,000 to $20,000 in closing credits or a rate buydown, available only if you finance with their in-house or partner lender. Sometimes that deal is genuinely the best one. Sometimes the lender's rate and fees quietly claw back most of the credit. The test is the one from Chapter 7: get two or three outside Loan Estimates for the identical loan and compare total cost line by line; the forms are standardized by law precisely so you can (see the CFPB's Loan Estimate explainer). Take the incentive only when it survives that comparison.
Two more habits protect you. First, hire your own inspector even though the house is new, and buy phase inspections: one before the foundation pour, one before drywall hides the framing, plumbing, and wiring, and one final (Chapter 10). City code inspections are a floor, not a quality check. Second, work the punch list, the written record of every defect the builder must fix, and get the warranty terms in writing before closing. Builder contracts are written by the builder's lawyers; in many states an attorney review is cheap insurance.
Co-buying: paper the exit before the entrance
Buying with a sibling, partner, or friend doubles your buying power and your legal complexity. The deed will name one of two main title forms. Joint tenancy gives owners equal shares with a right of survivorship: when one owner dies, their share passes automatically to the other, outside any will. Tenants in common allows any split (60/40, 75/25), and each owner's share passes to their own heirs. Married couples usually take the first; co-buyers with unequal money in, or children from elsewhere, usually want the second. Note what title does not change: on the mortgage, each borrower is fully responsible for the whole payment no matter whose name covers what share.
The document that actually prevents disasters is the co-ownership agreement, the contract almost everyone skips: who pays what each month, what happens when someone misses a payment, what events let an owner force a sale or a buyout (a job move, marriage, death), how a buyout price gets set (usually a fresh appraisal, sometimes minus selling costs), and how long the other owner gets to fund it. Signing one costs an attorney visit. Not having one costs a lawsuit between people who used to share holidays.
Renee and her sister bought their duplex as tenants in common, 60/40, matching their down payments, with their mother renting one unit at cost. Their co-ownership agreement runs four pages: expenses split 60/40, a shared repair fund of $250 a month, a 90-day right of first refusal if either wants out, buyout price set by a neutral appraisal minus 6% assumed selling costs, and a payment-default clause that converts missed months into a shift in ownership share. They have never needed it. Renee says that is exactly the point.
Self-employed buyers: the write-off boomerang
Lenders love W-2s because someone else vouches for the income. Self-employed buyers vouch for themselves, so most lenders want two years of tax returns and qualify you on your net profit after write-offs, averaged across those years (and treated even more cautiously if the trend is down). Every deduction that saved you tax also shrank the income a lender will count. Some items get added back (depreciation is the big one), but most do not.
The fix is the plan-ahead year. In the one or two tax years before you apply, weigh each optional deduction against the buying power it deletes; a write-off that saves $1,500 in tax can erase tens of thousands of dollars of loan eligibility. If the returns still will not carry the loan, bank-statement loans qualify you on 12 to 24 months of business deposits instead of tax returns. They are real and legal, but they typically cost a noticeably higher rate and a bigger down payment. Treat them as a bridge while you build two cleaner tax years, not a first choice.
Priya's consulting practice billed $160,000 last year, but after $58,000 of write-offs her return shows $102,000, and the prior year showed $94,000. Her lender averages the two and qualifies her on $98,000, which caps her housing payment near $2,287 a month under the 28% guideline from Chapter 3. Billings alone would have suggested $3,700. Priya's move for next time: she is taking fewer optional deductions for two tax years before her next purchase, on purpose, with her accountant's numbers in front of her.
Buying from a distance
Remote purchases work; thousands of military families and job movers close on homes they have never stood in. The trades are simple. Your agent's video walk-through replaces your eyes, so ask for slow pans, open closet and panel doors, street noise, and a walk around the whole exterior. Your inspector becomes your most important hire: pay for the add-ons (Chapter 10), join the inspection by video, and call them afterward with questions. Research the things a visit would have surfaced: flood zone, insurance quotes, property taxes, commute at rush hour, and the HOA documents above.
Closing can happen by mail, by power of attorney, or by remote online notarization where your state allows it; your title company will steer you. Two rules are non-negotiable. Never skip the final walk-through (in person if you possibly can, live on video the same day if not). And be extra paranoid about wiring money, because every step of a remote deal happens over email: verify wire instructions by phone at a number you found yourself, as Chapter 11 drilled.
Buying in retirement: cash, mortgage, or both
For buyers with the money to choose, the cash-versus-mortgage question is really a question about the withdrawal plan. Paying cash means no payment and no 6.55% interest, a guaranteed return no bond will match this year. But it converts a large pile of flexible money into a house you cannot spend, and getting it back out later means selling, or borrowing in your 70s. Carrying a mortgage keeps the portfolio intact but forces monthly withdrawals to feed the payment, and the Personal Finance Guide, Chapter 23, explains why forced selling in early bad-market years (sequence risk) does damage an average return never repairs.
There is a middle path, and Carlos and Elena walked it in Chapter 13: a normal down payment and mortgage to buy on their own schedule, then a $200,000 recast once the old house sold, cutting the payment to about $1,009 without touching their investment accounts in a down month. One more product exists here: the reverse-purchase loan (a HECM for purchase) lets buyers 62 and older buy with no monthly payment, with the loan repaid from the home's eventual sale. It is complex and expensive enough that federally required counseling comes with it; bring your own fee-only advisor too.
In retirement, size the housing decision against the withdrawal plan, not the rate. Keep enough liquid that the house never forces you to sell investments in a bad year, and never spend reserve money to avoid a mortgage on principle.
Where people go wrong
- Reading the unit and skipping the building. Condo buyers tour the kitchen and never open the reserve study that predicts the $15,000 assessment.
- Taking the builder's credit without shopping it. An incentive that requires their lender is only worth its net cost against two outside Loan Estimates.
- Co-buying on a handshake. Title form plus a co-ownership agreement costs hundreds now; untangling a handshake costs a friendship and a court date.
- Maximizing write-offs right up to the application. Self-employed buyers often discover at pre-approval that their tax efficiency deleted their loan.
Key takeaways
- A condo purchase is two purchases; the HOA's budget, reserve study, and minutes tell you whether the second one is solvent.
- Builder lender incentives are real money only after they beat outside Loan Estimates, and new construction still needs your own phase inspections.
- Co-buyers choose a title form (joint tenancy or tenants in common) and sign a co-ownership agreement with exit triggers and a buyout formula before closing, not after a fight.
- Lenders qualify the self-employed on roughly two years of averaged net profit, so plan tax write-offs a year or two ahead of a purchase.
- Remote buys run on your agent's camera, your inspector's eyes, and phone-verified wires; retirement buys are decided by the withdrawal plan, with the recast as the bridge between selling and settling.
Sources: CFPB Buying a House · CFPB Loan Estimate explainer · The Finvest Personal Finance Guide