Sunday, May 02, 2010

FHA Approval and your Condo Association

Is your condo building FHA approved? Should it be?

Federal Housing Authority backed loans (FHA loans) are a popular product among home buyers. The loans allow lower down payments and lower credit scores than conforming loans and still offer the benefit of today's low mortgage interest rates. But FHA loans can only be used in FHA approved condo buildings. There are basic criteria a building must meet to be approved.
Click HERE to view the checklist for condo association FHA approval

This year already my partner Bob and I have helped several buildings become FHA approved so our buyers and sellers could put a deal together. In other cases, we have seen buyers pass on some of our listings because the building was not FHA approved and they did not want to wait for the approval. The buyer initiated approval process can add an extra month to the length of time from acceptance to closing. There are two basic ways your condo building can become FHA approved:

  1. Your condo Board and owners initiate FHA approval through a reputable lender.
  2. A buyer, upon making an offer, may have their lender initiate FHA approval.

Please feel free to call or email us if you are considering FHA approval for your building.We will provide reputable lenders that can answer questions and are willing to initiate the approval process. FHA has limits on how many FHA backed loans may be currently active in a building, so this caps any "over leverage" a condo association may face. We look at it as a very marketable positive to first time buyers especially when selling a condo.

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