FHA Commissioner Announces Delay of New FHA Condo Rule ( http://ping.fm/EsjsE )

Maybe there is still hope for all those FHA buyers trying to get into their first home afterall!

Can an FHA buyer still purchase a condo in Long Beach, California?  Well, that depends on who you talk to.  A lender can tell you that they can do a loan all day long but at the end of the transaction when the talking stops and the funding is due to occur and it can't then it doesn't really matter what they said before.  The point is that lending guidelines are changing daily.  If we are not updating our knowledge about what is happening in the mortgage industry right now, we may as well not even be Realtors!

As of September 1, 2009, new condo purchase rules were enabled which state that if a condo building was converted a reserve study must be produced and if the reserves are not at 60%, HUD will not insure an FHA purchase and therefore, an FHA buyer cannot purchase that unit. But wait...there's more!

As of October 1, 2009, all FHA approved condo projects must be certified every two years.  A reserve study is needed and if reserves are not at 60%, then that project will lose its certification and there will be no more FHA purchases in that building, at least for two years.  Then the association can reapply for certification. 

Let us not forget that the owner occupancy ratio has to be 51% or higher and that is just today.  It can change at any time!

Right now the easiest way to purchase a condo in Long Beach is to be a conventional buyer.  But how many people just have a 15% down payment ready to go?  Not many and especially in this economy and market climate! It almost seems like purchasing a single family residence is going to be the only option for FHA buyers for a while.

It is amazing how our market continues to change.  As the market began its correction it was no mans land.  Then as prices started to tumble it became a buyers market. Once the buyers got out there and started buying as quickly as possible it became a false sellers market because of supply or lack thereof and demand.  Now it feels as though it is changing one more time.  Everyone is waiting with baited breath for the incoming long promised REO listings that are due to surface after the moratorium was lifted. In the meantime, pickins are slim out there!  If something is priced right and it is in good condition, it usually sells within its first week on the market and with multiple bids and usually above asking.  However, strategy wise, bidding higher and higher can come back to bite a buyer if the property doesn't appraise which in this declining market can happen more often than not.  If you are dealing with a bank owned property, then there is a really good chance they will be realistic and reduce their price based on the appraisal.  However, if it is privately held, they have a bottom line and if they cannot meet their bottom line by selling it at the appraised value they may choose to hold onto it and rent it or continue to live there.  Lord knows that the banks are coming around finally and doing loan modifications these days to stop foreclosures from occuring.  Take nothing for granted in this market and don't assume you have it all figured out because by tomorrow, it is going to change again.

So many people that I talk to tell me that they don't want to buy a home right now because prices are still dropping. Yes, I say...you are correct. But, why would you wait for prices to drop?  Why don't you drop them yourself? They say, "Huh?" If a home you fall in love with is listed for $350,000 and you offer the seller $325,000 and they accept your offer...didn't you just drop the price of the property yourself? And in this market sellers are wheeling and dealing! They want out for so many reasons! Some are just as worried about prices going lower as you as a buyer may be! But...find that happy medium and everyone wins! Give me a call and let's go on a hunt! I think you will be pleasantly surprised by what you can buy for the money these days!  Affordability is back in style and you are about to become a style guru!