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HUD/FHA Approval For Condominium Complexes
It's Important for Your Condominium Community to Be HUD/FHA Approved
The Feds changed the game.
You now need to be HUD and FHA approved before your condominium community can provide FHA loans for your buyers. When your complex qualifies you must be re-certified every 24 months.
If your condo community is not HUD/FHA approved you're passing up on lots of buyers.
For those who can't be eligible for a conventional loans the FHA loan program is the answer.
Based on DQ News in April 2011 - 33.4% of the purchase mortgages used in 20 from the largest metro areas were FHA-Insured and the November 2010 Realtors® Confidence Index reported that Nationally 39 percent of recent buyers obtained a home with FHA-insured loans.
If your condominium community is not FHA approved you are passing up on lots of potential buyers. This can also affect current homeowners once they visit sell their unit.
For many very first time house buyers qualifying for a conventional loan isn't possible. With the FHA you will find programs that make it feasible for these people to get affordable financing.
The advantages of the FHA Loan Program
- A minimal deposit
The FHA program lets buyers put as little as 3.5% of the cost down. As you can imagine this opens many doors for people that wouldn't otherwise be in a position to come up with a conventional down payment.
- Help with closing costs
Qualified applicants may also receive as much as 6% towards settlement costs. This further reduces the loan and deposit amount.
- Co-Signer requirements
Another area of the program allows for a blood in accordance with co-sign. Why is the program different is when the home-buyers don't have enough credit to qualify by themselves a blood relative can co-sign without needing to reside in the house that is being purchased.
With the aid of those benefits people with little credit, low and moderate incomes and first time house buyers convey more opportunities to find affordable housing.
These kinds of people constitute a large part of these buying homes. Very first time house buyers are usually the ones that are less qualified for conventional loans. Without having to be HUD approved your condo community will not be able to provide affordable financing in the FHA.
Recently HUD made drastic changes to their condo approval program. These changes jeopardize the supply of FHA loans for condominiums.
HUD Changes:
- Removal of spot approvals
- Mandatory re-certification for projects approved just before 2009
- Re-certification every 24 months
The removal of spot approval can cause major concern and trouble for your condominium community. Spot approvals gave every condo community a way to assist people requiring FHA programs. Loans were decided on an when needed basis.
Should you be counting on spot approvals to obtain financing for those homebuyers that need FHA assistance that option is no more available. You won't be capable of getting FHA assistance to purchase a home in your community.
Now full HUD approval is needed for anyone wanting to make use of the FHA loan program.
In case your condominiums have to be certified or re-certified now is the time to do it. It's anticipated that there will be a boatload of applications to HUD for FHA approval within the next couple of months so get yours in now. First come - first served.
