Purchasing Virginia Condo with FHA loan? Read out the Major changes coming in the lending industry
If you thinking of buying a condo in the Northern Virginia area, many of the condos are not approved for FHA loan that may affect the price and purchasing ability of the buyers.
FHA financing is a major reason why buying a condo is still a viable option
Huge changes for condos that want to use FHA financing.
•· AS OF 12-7-2010, ALL CONDO PROJECTS THAT WERE FHA APPROVED PRIOR TO 10-1- 2008 WILL EXPIRE. THIS MEANS THOUSANDS OF CONDO PROJECTS WILL EXPIRE 12-7. You can, however, order case numbers on any of these currently approved projects prior to 12-7 and still close after the expiration date (provided all is O.K. on the project review required on each individual loan). These projects will have 6 months to get recertified, but no case numbers will be issued until they are. If the project fails to get recertified within the 6 month period, a full new approval package must be sent to HUD.
•· CONDO PROJECTS APPROVED PRIOR TO 1-1-2000 CANNOT BE RECERTIFIED, AND A FULL PACKAGED PROJECT APPROVAL PACKAGE MUST BE SUBMITTED TO HUD as if they had never been approved before. This process may take 8 weeks or longer depending on the volume of new project packages HUD receives.
•· Condo projects approved after 10-1-2008 will expire upon the 2 year anniversary of their last approval or last recertification.
•· CHERRY CREEK IS A HUD DIRECT ENDORSEMENT LENDER, WE CAN APPROVE EITHER RECERTIFICATIONS OR NEW PROJECT APPROVALS OURSELVES PROVIDED ALL HUD/FHA REQUIREMENTS ARE FULLY AND CLEARLY MET. Packages will be submitted to HUD for approval if there are any questions about the condo documentation. The costs, which are usually paid by the HOA, are as follows:
Recertification $900 - $1,100
Full Approval $2,000-$2500
The approximate time frames for approvals:
Recertification: If Cherry Creek can do it 2 weeks
If HUD must do it 4 weeks
Full Project Approval If Cherry Creek can do it 2-3 weeks
If HUD has to do 8 weeks
At Cherry Creek we are fortunate to have a dedicated FHA condo department for the sole purpose of recertifying and approving condo projects.
If you have condo buyers, get them into contract before 12-7-2010 so a case number can be ordered to avoid these issues.
Without FHA financing many current condo owners will face a reduced pool of buyers and quite possibly more time on the market.
HUD's Condo Recertification Cover Letter & Checklist
http://www.hud.gov/offices/hsg/sfh/condo/initialchecklist.doc
Mortgagee Letters
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/2009ml.cfm
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