FHA announced that it will put new requirements into effect for condominium financing. As of the writing of this article, the new requirements were schedules to take effect October 1, 2009. However, there was talk of delaying enactment until November 2009 to facilitate closing of first time home buyer tax credit transactions. Buyers should consult with their lender to determine whether the regulations will impact their purchase efforts.
In some cases, the new requirements will eliminate FHA loans to entire condo projects while for others, it will make the process of obtaining an FHA loan considerably more difficult and time consuming.
FHA financing will still be available for condo projects that are existing, conversion, under construction and manufactured housing condominium projects....
With the new requirements, the SPOT loan approval process was eliminated....
The following conditions are among those that must be avoided or mitigated. It is unclear how these conditions can be mitigated so if any of these conditions exist in a condo project, the parties should understand that these conditions will likely affect the availability of FHA financing.
· The project is located in Special Flood Hazard Area.
· Potential noise issues if the condo project is located within 1000 feet of a heavily travelled road, 3000 feet of a railroad, one mile of an airport or five miles of a military airfield....
These new and revised regulations will have a dramatic affect on the availability of FHA financing for condominiums. Condo buyers who are relying on the availability of FHA financing must be certain to build sufficient time into their closing dates to insure project approval for the condo project....
...The preceding is an opinion from Annie Fitzsimmons, the attorney who answers questions for the Washington Association of REALTORS® Legal Hotline. The Legal Hotline lawyer does not represent Washington Association of REALTORS® members or their clients and customers. For additional questions or information, please contact Jen at (206) 293-1005 or send me an email to jen@jenhudsonhomes.com.
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Jen Hudson
206-293-1005 cell
360-652-1200 office
jen@jenhudsonhomes.com
CCIM Candidate, CDPE, GRI, Realtor
Windermere Real Estate/M2, LLC
Want to learn more about real estate? Visit my website at www.jenhudsonhomes.com
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