Over the past few months, there has been a lot of questions about FHA’s changes in condo guidelines. The date has been a moving target, the modifications to the guidelines keep changing. So what is happening now?
The biggest change in my opinion is that FHA will no longer allow spot approvals for condo project. This “permanent” change will happen on February 1st, 2010. What does that mean? If you are trying to purchase a condo in a home owners association that is NOT approved by the FHA, you will have to get the entire project approved by the lender* prior to the loan being approved. This involves significantly more time and paper-pushing, as well as a lender who wishes to be involved in the condo approval process. On the plus side, once that condo project is approved, it will be much easier to sell other units in that project.
Here is some good news (note, these are temporary changes):
-FHA will lend on up to 100% of the units in a project, if the project meets FHA criteria (call me for more information)
-FHA will no longer consider bank owned condos (foreclosures) in their occupancy calculation, this will make many projects more marketable.
-Construction presale requirements have dropped to 30%.
These changes are available for case numbers issued between December 7th, 2009 and December 31st, 2010
Today, over half of all purchases are being financed by FHA mortgages. Rather than trusting your mortgage to the first person who picks up the phone, trust your home to an expert.
For more information, call Rich Bonn at 281.841.1723.