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With FHA comes new rules and new problems!!

By Afie Makinde

Real Estate Agent with Exit Realty Properties

March 19, 2008 02:02 PM

I have a lovely buyer who is due to have her first baby in May, 2008. I have been working with her for three months and I finally found her a lovely home and she qualifies for FHA mortgage. Evrything seems to be goining smooth until 2 weeks to our proposed closing and the mortgage broker informs us that the building is not FHA approved. Why are we being told this two weeks to closing? Why didn't the mortgage broker pick it up when we started the process? Why didn't the appraiser who was supposed to be "great" at what he does pick up on it? My buyer had already spent money on an appraisal and inspection ($450) which she should have in her pocket. Needless to say, she can't go through the stress any longer as the baby is now kicking constantly.

Funny things happened during this entire process though. As I started to do whatever it took for my buyer, I did investigate this and called the HOA. they required $150 to complete any questionnaire for a "spot approval". I then asked for the President of the HOA who turned out to be a realtor with over 20 years experience in the business. We asked her if the following was in the condo docs "First right of refusal". To my amazing surprise, she didnt know what I meant and no matter how much I tried to explain it, she didn't know. How does she run the HOA and her RE business if she doesn't know basic stuff like this?

We all need to get educated on FHA loans since it is the newest loan out there. Don't get caught when it is too late!!

Afie Makinde

484-410-6569

Comments(5)

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Susan Davis

Austin, TX

Excellence Advocate

Yes you do need to get informed. there are many things to know about them and they may not be the best choice for your buyer. Dont just leave it up to the Mortgage Lender, a lot of them dont what all the guidelines are either!

To your success,

Susan

Mar 19, 2008 02:09 PM

Heather the Realtor Orlando, Lake Mary

LemonTree Realty - Orlando, FL

First Time Home Buyers, Bank Owned Homes

Hi Afie this is the second time I have heard this happening to someone I had no clue before recently that a condo building has to be approved in order for someone to get FHA funds.

Mar 19, 2008 02:10 PM

JEROME G

White Plains, NY

Yikes.....oh well! I hope your client deliver the baby with no stress. I hope things get better.

Mar 19, 2008 02:12 PM

Kris Wales

Keller Williams Realty - Lakeside Market Center - Macomb, MI

Real Estate Blog & Homes for Sale search site, Macomb County MI

Afie, type in the words "HUD approved Condos" in Google and it will bring you to a site that gives you a list of approved units. I do this with all of my FHA buyers if they are interested in a condo. If a particular complex is NOT listed I then ask the mortgage lender about spot approvals. Doing this saves much time and expense as you found out. Sorry this happened to you.

Mar 19, 2008 09:32 PM

Exit Realty Properties - Coral Springs, FL

Realtor, Broward County, FL

Thanks to all of you for such wonderful comments and advice. My buyer is now moving into a rental that I found for her and in one year, she will have saved enough to buy a home and I would have gotten as much education as possible under my belt.

Thanks Kris, now I know how to find approved condos. In my case, this condo building was once approved and no longer. With spot approval, someone (buyer) seems to have to pay the 150 that they demand to complete a questionnaire.

Many thanks all.

Mar 20, 2008 04:59 AM

Comments(5)

Afie Makinde

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