FHA financing used to be only for a select few. With the recent changes to the mortgage world, FHA has become much more popular and is in fact one of the most attractive financing options currently available when buying a home.
Under FHA approved loans, you can put as little as 3% down toward a home. Significantly less than the 5-10% typically needed for a conventional loan. In addition, the amount that you can negotiate a seller to put toward your closing costs is significantly higher.
In cities like Seattle, FHA loans have the greatest appeal to those who are looking for their first home or make less than a million dollars per year (ie. most of us). Condos are attractive options for this group.
But FHA loans only work on a project if they are FHA approved right? Not necessarily.
If a particular condo complex is FHA approved then there is no problem. Using your FHA loan to make an offer. If it is not, then you will need to have your agent get a hold of the FHA Spot Approval. It is basically a checklist that your mortgage agent needs to have filled out by the condo association rep. to make sure that the projects financial situation is secure. If the complex has no major red flags, such as a law suit against it, or a significant pending special assessment, then everything should be fine.
So go ahead shop your hearts out, and if you find the perfect condo and are concerned about FHA, breathe a sigh of relief. It isn't as difficult as it sounds.