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HUD/FHA Approval For Condominium Complexes
It's Important for the Condominium Community to become HUD/FHA Approved
The Feds changed the game.
You now need to become HUD and FHA approved before your condominium community can offer FHA loans to your buyers. When your complex qualifies you have to be re-certified every 24 months.
If your condo community is not HUD/FHA approved you are missing out on lots of buyers.
For those who can't be eligible for a conventional loans the FHA loan program is the answer.
According to DQ News in April 2011 - 33.4% from 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 latest buyers obtained a home with FHA-insured loans.
In case your condominium community isn't FHA approved you are passing up on a lot of potential buyers. This will 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 less than 3.5% of the cost down. As you can imagine this opens many doors for individuals that wouldn't otherwise be in a position to come up with a conventional down payment.
- Help with settlement costs
Qualified applicants can also receive as much as 6% towards settlement costs. This further cuts down on the loan and deposit amount.
- Co-Signer requirements
Another area of the program allows for a blood in accordance with co-sign. What makes the program different is that if the home-buyers do not have sufficient credit to qualify by themselves a blood relative can co-sign while not having to live in the home that is being purchased.
With the aid of those benefits individuals with little credit, low and moderate incomes and very first time house buyers convey more opportunities to find affordable housing.
These types of people make up a large part of those buying homes. First time home buyers are often those that are less qualified for conventional loans. Without being 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 October 2009
- Re-certification every 2 years
The elimination of spot approval may cause major concern and problems for your condominium community. Spot approvals gave every condo community a method to assist people requiring FHA programs. Loans were decided on an when needed basis.
Should you be counting on spot approvals to acquire financing for all those homebuyers that require FHA assistance that option is no more available. You won't be capable of getting FHA assistance to purchase a home within your community.
Now full HUD approval is needed for anyone attempting to use the FHA loan program.
In case your condominiums need to be certified or re-certified now is the time to do it. It is anticipated there will be a boatload of applications to HUD for FHA approval within the next couple of months consider getting yours in now. First come - first served.
