There's been fantastic news coming from the mortgage underwriting universe these past few months. BUT, they just had to temper it with some not so helpful changes. Buyers are getting dizzy staying apace of the changes in our industry. Here are some of the recent updates that we're finding most directly impact us here in south Orange County, California.
Fantastic!
HUD/FHA will suspend the Anti-Flipping policy beginning in February, allowing buyers to finance homes that were purchased by investors and immediately re-sold with some provisions. This should help tremendously, particularly in the entry-level price ranges for condos in areas like Rancho Santa Margarita, Mission Viejo, Aliso Viejo, Irvine and Laguna Niguel.
Conventional PMI is Back! Did you ever think you'd see the day where this was exciting news? Today's that day. Buyers may now finance up to 95% with conventional financing, up to the local conforming loan limit of $417,000.
Not so Fantastic!
HUD will no longer issue Spot Approvals for Condo Associations. These spot approvals were a commonly used life-line for buyers who needed FHA financing in tracts where HUD approval has not been granted. Our banking partners may still be able to save a sale by submitting a fast track Condo approval package to HUD. But I wouldn't hold my breath on those...
HUD has also tightened the guidelines for Condo Association approval. There may now not be more than 15%of the units with HOA account delinquencies, and 51% of the units must be owner occupied to qualify. Additionally, no one investor may own 10% or more of the total units. This can get tricky in smaller associations.
What happens if you write an offer on a condo that is HUD approved at the beginning of your escrow and then it falls off the HUD approved list? They may depend on your lender. Our local banks will honor the commitment as long as your HOA Cert has been received and approved by underwriting while the association is still HUD approved.
It's nothing but fun! Call me for more information on what's happening here in the sunny Southland!
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