FHA Preapproval and Non FHA Approved Condo Complexes

By
Real Estate Agent with Windermere Real Estate

FHA financing used to be only for a select few.  With the recent changes to the mortgage world, FHA has become much more popular and is in fact one of the most attractive financing options currently available when buying a home. 

WHY? 

FHA LoansUnder FHA approved loans, you can put as little as 3% down toward a home.  Significantly less than the 5-10% typically needed for a conventional loan.  In addition, the amount that you can negotiate a seller to put toward your closing costs is significantly higher. 

In cities like Seattle, FHA loans have the greatest appeal to those who are looking for their first home or make less than a million dollars per year (ie. most of us).  Condos are attractive options for this group. 

But FHA loans only work on a project if they are FHA approved right?  Not necessarily. 

If a particular condo complex is FHA approved then there is no problem.  Using your FHA loan to make an offer.  If it is not, then you will need to have your agent get a hold of the FHA Spot Approval.  It is basically a checklist that your mortgage agent needs to have filled out by the condo association rep. to make sure that the projects financial situation is secure.  If the complex has no major red flags, such as a law suit against it, or a significant pending special assessment, then everything should be fine.

So go ahead shop your hearts out, and if you find the perfect condo and are concerned about FHA, breathe a sigh of relief.  It isn't as difficult as it sounds.

Posted by

Rob Graham, Managing Broker

Windermere Real Estate

206-321-6349

robgraham@windermere.com

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Topic:
Home Buying
Location:
Washington King County Seattle Belltown
Tags:
loan
federal housing administration
fha loan
fha guidelines
fha mortgage
mortgage

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Ambassador
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Courtney Cooper
206-850-8841
All Seattle Homes for Sale: CooperJacobs.com

FHA is definitely a big factor for many buyers right now - I have worked with a lot of FHA people lately!  good post!

October 17, 2008 06:19 PM
Anonymous #2
Anonymous
Michelle Wilson, Loan Officer with Alpine since 2002

Yes, I agree.  Good post.  The mass media keeps talking about how people need to put 20% down and have 800+ credit scores and this just isn't true.  I have seen a huge shift to FHA financing in recent months and it's a great option for many people, particularly first-time buyers who can't afford a huge down payment.  And, you don't need perfect credit. 

I have also had success with FHA spot approvals recently.  In general, all the "spot approval info" can be provided by the HOA or management company, but I have also had success obtaining missing info from the Title Company when the HOA does not keep track of specific information. 

I think all agents with condo listings should try to make sure FHA financing is possible- either by confirming it's already FHA approved, or by going through the steps up-front to obtain spot approval. 

October 18, 2008 06:54 PM
Rainmaker
43,957
Rob Graham
Rob Graham
Windermere Real Estate

Hey Michelle.  Thanks for the comment.

October 18, 2008 07:03 PM
Anonymous #4
Anonymous
Alan Kehle
Could you please tell me if you know of a website that lists all condominiums in King County that have gotten FHA approval? I am a potential first time home buyer and would really like to be able to get that information from an unbiased source.
May 21, 2009 10:03 AM
Rainmaker
43,957
Rob Graham
Rob Graham
Windermere Real Estate

Alan,

Check out this web site:

https://entp.hud.gov/idapp/html/condlook.cfm?in_fha=Yes

Also, I chould mention that the down payment required for this kind of loan has gone up to 3.5% since I first created this post. 

Keep in mind that if you are looking at condos, it is possible to get what is known as a spot approval for a specific project if a prohct is not pre approved for FHA financing. 

Hope the info helps.

 

Rob

May 21, 2009 11:46 AM
Anonymous #6
Anonymous
Zack

Alan,

 

I've created a new site that lists the information from the HUD in an easy to browse format:  <a href="http://www.forfha.com/washington">http://www.forfha.com/washington</a>

 

http://www.forfha.com/washington

November 27, 2009 01:31 PM
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Rainmaker
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Rob Graham

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