FHA has extended the spot approval til 2/1/10 and spot approvals will be eliminated 2/1/10.

Apparently they will allow currently approved condo projects to be valid for 2 years from 2/1/10.

New approvals are expected to take 8-12 weeks.

Eligible condo projects are considered to be: new construction, existing projects, or condo conversions.

What does this mean for the buyer who is seeking a condo or their loan approval price will only allow for purchase of condo's?

Several Things:

• Buyer if you have been sitting on the fence you need to get out and start looking now .
• Even though there are several approved condo projects , there is also several that are not that will fall into your price range.
• The spot approval will allow for a quicker resolution and acceptance.
• Waiting until 2/1/10 will cause considerable delays and no guarantees your lender will approve these projects. They are costly and can take up to 2-3 months. However once approved they will remain so.
• Being FHA buyer has its advantages and disadvantages.......You lose a lot of clout when you are competing with all cash buyers or those putting down 10-20 %. In particular on short sales and REO's they will migrate to what they consider the strongest buyer, All cash first, large down payment 2nd. So identifying now as many condos as possible that will meet your criteria will give you greater chance of finding one where your offer will be accepted. Do NOT get discouraged if you and your realtor write several offers before you have one accepted. Persistence does pay off.
• Remember depending on your area many of the condos on the market are short sale which will take 2-3 months to process and be approved and then if you want until 2/1/10 you will have an additional 2-3 months for project approval.

Short sales are expected to be around for at least another 2 years even though we have been seeing some more homes come on the market that are not in distress. I am not saying you need to purchase the first thing you see. What I am saying is start looking now, keep your eyes open and jump on those condos that meet your specific needs when they arise.

Obviously price and current market trends in your area will determine what you offer. Have your Realtor pull comps and examine the trend in the area you are seeking and make your best offer based upon those observations as well as any competition your Realtor has been made aware of. Some believe you have to offer asking or above....in some cases that may be very true.......but one of the most important influences is how your offer is written! Keep it simple, straight to the point, with buyer protections for loan, appraisal, inspections etc. Keep your contingency periods as short as possible. Take your cue from your lender in terms of time needed to obtain appraisal and review file for loan approval.

Play it smart! Make sure you have teamed up with an experienced mortgage broker and have completely been pre approved subject to finding home and appraisal and final review of your financial status. In other words your lender should have requested from you up front a copy of your tax returns, pay stubs,verified your credit scores etc and job history etc......

If you do not have a mortgage lender I can refer you to one of several with experience.

I serve the greater Walnut Creek area and surrounding communities........

DRE License #01255032