Wanting to sell your condo, you might want to read about FHA easing financing rules

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Real Estate Agent with Coldwell Banker Brokers of the Valley, Yountville Napa Valley

If I can help you find the perfect Napa Valley property, please email me

Curtis@NapaValleyAddress.com

FHA eases burdensome condo financing rules

The biggest source of funding for low-down-payment condo mortgages, the Federal Housing Administration, has revamped controversial rules that caused thousands of building across the country to lose their eligibility for FHA financing.

  • The revised guidelines, which were issued Sept. 13 and took effect immediately, should make it easier for a large number of homeowner associations to seek certification by the FHA.  Without approval of an entire development, no individual unit can be financed or refinanced with an FHA mortgage.
  • The previous rules prohibited FHA insurance of units in buildings where more than 25 percent of the total floor space was used for commercial or nonresidential purposes.  Yet many condominiums in urban areas have lower floors devoted to retail stores and offices that generate revenues that help support the entire project.  The revised rules allow exceptions of up to 35 percent commercial use, and provide for additional case-by-case exceptions to 50 percent or higher.
  • The Community Associations Institute, the condo industry’s largest trade group, is predicting that the relaxed FHA rules will spark home sales and helps tens of thousands of condominium communities begin to recover from the housing slump.
  • The new rules also offer greater flexibility on investor ownership.  In existing developments, one or more investors are now allowed to own up to 50 percent of the total units provided that at least half of the units are owner-occupied.  The previous rule required that no more than 10 percent of units could be owned by a single investor.
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Rainmaker
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Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

The FHA changes will be helpful for many condo transactions.

Have an outstanding week and be sure to have your camera in hand to capture the special moments when you are out and about.

Oct 01, 2012 03:07 PM #1
Ambassador
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Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale - San Jose Probate Agent

Curtis, FHA approval on condos has been historically difficult and takes FOREVER.  This is good news for many. In my area fHA financing cannot compete with all of the cash offers that can close in 10 days. 

Oct 01, 2012 06:16 PM #2
Rainmaker
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Robert (Bob) Gilbert
Berkshire Hathaway HomeServices Anderson Properties - Katy, TX
Your Katy TX Real Estate Expert

Curtis,

You are main man for updating on these governemntal rule changes. These FHA changes appear to be all positive. Thanks and Cheers my friend..

Oct 02, 2012 09:32 AM #3
Rainmaker
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Curtis Van Carter
Coldwell Banker Brokers of the Valley, Yountville Napa Valley - Yountville, CA
Napa Valley's Broker Extraordinaire in Yountville

Hi

This is so important in Napa. There are currently only two condo projects out of approximately 25 which have FHA approval. Thus, many buyers who would find these homes as very affordable here, cannot get financing to do so. With FHA loan default rate now well over 10%, who can blame. The one huge question I have, since they put themselves in this situation, guess who suffers for their lack of competency???? 

cheers cvc

Oct 02, 2012 11:36 AM #4
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Rainmaker
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Curtis Van Carter

Napa Valley's Broker Extraordinaire in Yountville
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