FINALLY!!! FHA Relaxes Condominium Financing Rules!!

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Real Estate Services
http://actvra.in/MHX

It is always been extremely difficult if not almost impossible to get FHA financing in many condominium properties.  This is because the Federal Housing Administration (FHA) has never fully supported the concept of condominium purchases. However, the FHA is going to make some temporary exceptions to the current rules.

Typical FHA rules for condominium financing provide that no one condominium in a condominium development can be eligible for financing unless the entire development has been FHA-certified. There are so many rules, regulations, and potential legal liabilities that many condo homeowners’ associations (HOAs) opt out of the process.  They had the luxury of doing this when markets were strong several years ago.

However, in today’s tight lending market, more and more buyers are wishing they could get the relatively “looser” financing offered in an FHA loan. Their dream has come true – at least for the now. The FHA announced recently that its requirements for development-certification will be loosened for the foreseeable future. They will allow FHA certification on mixed-use developments – an increasingly popular building and residential trend – “provided that the commercial interests don’t harm the building’s residential component” and the leeway regarding delinquent association dues has been expanded so that no more than 15 percent of units can be more than 60 days delinquent on dues. Previously, that number was 30 days. Also, condo association boards will be less liable for FHA certification violations than previously, which will make more condo developments more open to getting certified.

Under previous versions of the FHA condominium rules, about 2,100 of the 25,000-of condo projects nationwide were certified as of late 2011. Consequently, the FHA was insuring very few condo unit loans (35,433) and unit owners were losing money and buyers because financing was so hard to obtain. The FHA and the Community Associations Institute (CAI) predict that the rule changes “will spark home sales and help tens of thousands of condominium communities begin to recover from the housing slump.” Let’s hope so…this will be a tremendous benefit to the current market.

 

Paddy Deighan J.D. Ph.D

http://www.homesavers.pro

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  1. Joe Jackson 09/25/2012 07:23 AM
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Topic:
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Legal Aspects of Short Sales, Foreclosures, Loan Mods
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Rainmaker
130,762
Liane Thomas - Corona & Riverside Real Estate
Bringing you Home!
The Jet Team, Keller Williams Realty, Corona Real Estate

This is wonderful news for communities, like mine, with several condo complexes and a higher percentage of delinquent HOA accounts.

September 26, 2012 01:09 PM
Rainer
61,795
Eric Salonga
Your Key to the Central Valley
The Salonga Brothers at Castle Real Estate Group

That's great that first time home buyers can purchase condos that were previously unavailable to them.

September 26, 2012 08:49 PM
Rainmaker
158,052
Dan Derito
Success! Real Estate

Thank you for the update Paddy.   This may help some of those people who could otherwise afford to buy a chance to move out of apartments. 

September 27, 2012 04:45 AM
Rainmaker
635,084
Evelyn Kennedy
Alameda, Real Estate, Alameda, CA
Gallagher & Lindsey, Alameda, California

Paddy:

We have had difficulty with FHA and condos in my area.  I am so happy to hear the new regulations for condo. Thanks

September 28, 2012 10:17 AM
Rainmaker
1,165,850
Gene Riemenschneider
Turning Houses into Homes
Home Point Real Estate

This is great news for Condo communities and the market in general.  Thanks for the post.

October 02, 2012 03:34 PM
Anonymous
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Rainmaker
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Paddy Deighan JD PhD

Paddy Deighan J.D. Ph.D
What are my options for distressed real estate
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Additional Information

Author Bio: Paddy Deighan earned his Juris Doctorate and PhD Paddy consults with home owners on all of their distressed property needs

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