I was recently asked via my Facebook page ...
“How do you get a condominium approved for FHA (Federal Housing Administration) lending?”
I was recently asked via my Facebook page ...
“How do you get a condominium approved for FHA (Federal Housing Administration) lending?”
Informative article. This is a double edged sword. Condo owners should consider whether this is even a good idea for their project. Making borrowing easier for condo buyers could increase the chances of weak buyers defaulting in the near future and their subsequent foreclosure lisiting driving down prices in the condo complex.
Robert: Lots of things to consider prior to the approval process being tackled. Enough for a few more discussions, I'm sure! But once the decision has been made, hopefully the above proves helpful. Thanks for writing ...
Gene
That's a lot of information, Gene. Generally in Sacramento, if a condo complex is not on the approved list, agents just pass it by. I have been told there is no spot approval, and nobody has the time nor inclination to go through that process to get approved, LOL. However, I am fairly confident that in most cases, the % of owners to non-owners or the underwater HOA is enough to dissuade. We have too many short sales and foreclosures in our complexes. And the prices are so danged cheap, buyers just pay cash.
Elizabeth: Yours is a comment lament that I hear often. But for those that still want to trudge ahead, hopefully here's some help. And you mention a frequent issue. That of investors percentage or ratio. Condos are not easy or fun in most cases. I just read this morning that there is a strong push on FHA to reconsider condo loan guidelines because of exactly what you write and more. Stay tuned ... things may change yet again ..
Gene
Tagrid: Rules regarding Spot loans/approvals have changed. They became unavailable as of February 1st, 2010, I believe. The whole condo development/complex must be approved now. What was available to help your brother is no longer in the mix for new condo buyers. They've tightened the rules for approval and lending drastically because of the de-valuation of properties during the current housing crisis.
Gene
Gene - It is sad that the whole spot loan process was eliminated; did many a condo loans that way. These days, my condo sales have been strictly limited to the FHA or FM approved complexes. However, I am currently working with a borrower who is looking for a downtown LA loft and the only program that is conducive to this type of property is the FM HP program.
So many downtown lofts are in mixed used bldgs with a high percentage of investors. Furthermore, quite a few of the HOA's have ongoing legal issues with so many of the builders who may not have converted a lot of these units properly (key word here is properly - meaning maybe no permits for some of the work).
Don't even get me started on the bldgs that have been deemed "historic"; whole other issue. Anyway, this is where the FM HP program comes in handy because full HOA certs are not required and all they require usually is just the simple HOA questionnaire - usually!
Donne: As you say, there are some strong advantages to using and being educated regarding this program ... and this new incentive program just adds to those reasons and advantages. Seems spot loans are sadly missed, as evidenced by Tagrid's comment. You never know, they may appear again at some point. I read just this morning that much of this is under re-examination again. Is it any wonder people are confused???
Gene
Wow, my eyes glazed over after line 3 of this post. I admire any lender who tackles this complicated process. It will pay off in the end, but the headache.....
Most definitely, Jane ... but there's no way around it should a client wish to take this route. The good news is, once tackled .. the entire project is done and over with. Whew! This seems to be an area where agents seek me out (and other lenders, I'm sure). I think it's my appraising background paying off. Hoping that continues ...
Gene
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