I am preparing to list a condo in the Marble Hill subdivision in Elkridge, MD [more info about this listing coming real soon]. Although I am very familiar with the subdivision, having shown many properties, having sold a few and actually owning a condo there myself, I still want to and need to do my due diligence, check out all the comps and verify all the facts.
In doing so, I've been noticing a pattern.. almost every recent listing contained a warning: This community is not FHA approved! Some softened "the blow" and added an apology: sorry! Disclosing this information and making buyer's agents and potential buyers aware of this fact before they tour properties and possibly fall in love with one is, of course, not a bad thing. It's what we must do.
But we shouldn't turn facts into warnings, omit the reasons for the missing FHA approval, and possibly scare ready, willing and able buyers off. Sometimes there's a good reason why a community is not FHA approved. By the way, there are way more communities without FHA approval than there are with!
It is a common misconception that the Federal Housing Administration loans money. It doesn't, but it does insure mortgages. In order to be eligible for such insurance, communities must meet and maintain certain eligibility requirements - when they fail, they are not FHA approved. I don't want to get too technical, but to briefly summarize, two of the most common reasons are: too high of a delinquency rate (for dues & assessments) and too many investors vs. owner-occupants. But there can be other reasons, too, as is the case with the Marble Hill Condominium in Elkridge, MD.
The reason this Howard County subdivision is not FHA approved has to do with the Sex Offender Registry.
The condominium governing docs contain language that "restrict" (according to the FHA) owners in selling/leasing to people listed on the sex offender registry.
In my professional and personal opinion, this little tidbit of information makes the "not FHA approved, sorry" warning a whole lot less scary, especially because Ducketts Lane Elementary School sits right across the street from Marble Hill and the community is popular with young families.
Knowing this reason for the missing FHA approval could very well influence the buying decision of (some) people, and consequently help the Marble Hill community thrive (even more)!
When you are house-hunting in HoCo, or MoCo, or beyond and come across a warning that "this community is not FHA approved", don't let it scare you away, but ask WHY! You may just find that it's for a good reason!
You may also find that a different loan program has comparable, or even better, terms ... it never hurts to talk through your options with a reputable lender! Bridget "Mortgage Mama" McGee is one of them. Many, many communities throughout the country don't have FHA approval, it's not as scary or bad as some make it sound, and most buyers do have other options.
And should you be interested in buying - or selling, or both - in Marble Hill, I would love the opportunity to chat with you! Give me a call at 240.593.2860.
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