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.