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HUD/FHA Approval For Condominium Complexes
It's Important for the Condominium Community to Be HUD/FHA Approved
The Feds changed the sport.
You now need to be HUD and FHA approved before your condominium community can offer FHA loans to your buyers. Once your complex qualifies you have to be re-certified every 24 months.
If your condo community is not HUD/FHA approved you are passing up on a lot of buyers.
For people who can't qualify for conventional loans the FHA loan program may be the answer.
Based on DQ News in April 2011 - 33.4% from the purchase mortgages used in 20 from the largest metro areas were FHA-Insured and also the November 2010 Realtors® Confidence Index reported that Nationally 39 percent of latest buyers purchased a home with FHA-insured loans.
In case your condominium community isn't FHA approved you are passing up on a lot of potential customers. This can also affect current homeowners once they visit sell their unit.
For many first time house buyers qualifying for a conventional loan isn't possible. With the FHA there are programs making it feasible for these people to obtain affordable financing.
The Benefits of the FHA Loan Program
- A low down payment
The FHA program lets buyers put less than 3.5% from the purchase price down. Understandably this opens many doors for individuals that wouldn't well be in a position to think of a conventional down payment.
- Help with closing costs
Qualified applicants can also receive up to 6% towards settlement costs. This cuts down on the loan and down payment amount.
- Co-Signer requirements
Another area of the program allows for a blood relative to co-sign. Why is the program different is when the home-buyers do not have sufficient credit to qualify on their own a blood relative can co-sign without needing to live in the house that is being purchased.
With the aid of those benefits people with little credit, low and moderate incomes and first time home buyers convey more possibilities to find affordable housing.
These kinds of people constitute most of those buying homes. First time house buyers are usually the ones that are less qualified for conventional loans. Without being HUD approved your condo community won't be able to provide affordable financing from the FHA.
Recently HUD made drastic changes to their condo approval program. These changes jeopardize the availability of FHA loans for condominiums.
HUD Changes:
- Removal of spot approvals
- Mandatory re-certification for projects approved just before 2009
- Re-certification every 2 years
The elimination of spot approval may cause major concern and trouble for your condominium community. Spot approvals gave every condo community a method to assist people requiring FHA programs. Loans were selected an as needed basis.
Should you be counting on spot approvals to acquire financing for all those homebuyers that require FHA assistance that option is no longer available. You won't be capable of getting FHA help to purchase a home in your community.
Now full HUD approval is needed for anybody wanting to use the FHA loan program.
In case your condominiums have to be certified or re-certified this is the time to do it. It's anticipated there will be a boatload of applications to HUD for FHA approval over the next couple of months consider getting yours in now. First come - first served.
