The Federal Housing Administration (FHA) is the government agency responsible for insuring mortgage loans. Many first-time homebuyers obtain FHA financing because incentives such as, the down payment is as low as 3.5% of the total loan amount and it’s relatively easy to qualify for a FHA loan.
However,in the last four years, there has been a sharp decline in FHA-Approved Condominium Developments and buyers with FHA financing are experiencing disappointing results – loans cannot be funded or closed. Please note that buyers are not the only ones affected by this decline; homeowners trying to sell their units are also affected when FHA mortgages are banned.
Whether you are interested in buying or selling a condo or condo townhouse in Upper Marlboro, MD, here are some of the requirements for FHA approval that you should be aware of:
- The Delinquency rate can be no more than 15% for more than 60 days.
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Any investor/entity (single or multiple owner entities) may own up to 50 percent of the total units if at least 50 percent of the total units in the complex are owner occupied as principal residences.
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50% of the project must be owner occupied.
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The development can have no more than 50% concentration of FHA Loans.
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At least 10% of the HOA’s budget must go toward reserve funding.
- There is no pending litigation (routine collection activity or foreclosures excluded).
I recently came across an article about how thousands of condo projects have become prohibited lending zones for the FHA and the link to the article follows:
http://www.latimes.com/business/realestate/la-fi-harney-20140525-story.html
If you are thinking about selling or buying a home in Prince George's County, MD, Diana White-Pettis is here to serve you. Remember that “in dreams there are no impossibilities.” Go ahead, email me at dwpettis@aol.com or call me at (301) 502-2669 (cell), (301) 459-5040 (office) to see for yourself!
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