Refinancing while HOA litigation about to be filed against builder

Hi all, I am a bit of a dilemma right now.  I am currently looking to refinance my mortgage from a FHA to traditional loan to remove my monthly PMI.  I spoke to my broker and condo owners (who refi’d and received updated appraisals) in my building that my property has appreciated around 25-30%. I currently have 10% equity and banking on a high appraisal to add to make up the remainder I need to refi.   That being said, the HOA in my building are currently preparing to file a lawsuit against the builder due to structural defects in the building.  As of today, our lawyer has yet to file (will file in 1-2 weeks) and we’re not in court.  Technically speaking (I’m not a lawyer), we’re not in litigation as of today.  I’m assuming we’ll officially be in litigation once the amended lawsuit is filed.  I’m currently dealing with four lenders who I’ve informed of the issue.  Of the 4 Lenders, three supplied me their condo questionnaire to be filled out by the HOA & Managing Agent.  The condo questionnaire asks is “Is the building currently in litigation?”   As we are not in litigation but about to go into it, the HOA & Managing Agent will answer it as how it stands as of today’s date with no litigation.  Thus, this will be completed in good faith. The last lender, Citi, only requires limited review (which doesn’t need a questionnaire to be filled out) but has higher interest rate at 4.125 or 4.25%.  The others range from 3.50-4%.  My questions are: 1) Do banks only look at the condo questionnaire filled out by the HOA/Managing Agent during the refi process?  2) Do underwriters do extra due diligence outside of the questionnaire? 3) Should I go with the lender requiring a limited review? Do they also do their due diligence on HOA lawsuits during a limited review? I would hate to go through the refi process and have it go array when the HOA files a lawsuit in a few weeks.
Looking for any and all advice.  Just want to save $$$ from PMI.  Appreciate the help!