FHA Loans: No to Condos
It was not many years ago when a client using an FHA loan to buy a home was rare. Over the past few years, the FHA has been the go-to mortgage option for low to moderate income buyers.
For young first time buyers and buyers who don't have significant cash for a down payment the FHA has been a great option. Among the three major federal lending intermediaries including Fannie Mae and Freddie Mac, the FHA is the most flexible on credit issues. It is also lenient on debt ratios and allows down payments as small as 3.5 percent.
The issue with Condos is not the buyer's ability to qualify for an FHA loan, it's that thousands of condo developments are ineligible for FHA lending and the number of prohibited projects is growing. As a result of federal policy changes and decisions by condo associations, thousands of complexes have become prohibited for the FHA.
Since the FHA tightened the rules for condo the number of developments approved for financing has dropped by more than half. The number of approved developments is now just over 10,000 while the total number of condo developments is approximately 144,000. There are very few approved condo complexes in the Sacramento area and is becoming a problem for owners as well as buyers.
The FHA will insure mortgages only on units in condo developments which have passed a certification process that examines budgets, reserves, insurance coverage, percentage of renters, and condo fee delinquencies. According to the FHA this certification process reduces taxpayer exposure to future losses by eliminating poorly managed and fiscally week developments. Condo associations complain the evaluation criteria are overly strict and the process of certification is too expensive.
Various state associations of Realtors are now working directly with condo boards and asking them to re-think their decisions not to pursue FHA certifications and to do this for their owners benefit. The program stresses keeping the condo values at their highest, increasing the pool of potential buyers and helping owner use their equity.
FHA certification may be complicated and cost associations money but could be well worth it for current residents and future buyers.
If you have any questions about buying or selling a condo or using FHA loans please feel free to contact me at the MagnumOne Realty office in Roseville (916-899-6571) or send an email to JulieJ@Jalone.com.
Julie Jalone, wife and mother living in Rocklin, is an experienced professional Realtor ® serving
the Greater Sacramento area including Placer, El Dorado, Yolo and Yuba counties.
Julie may be reached online at www.jalone.com or by calling (916) 276-6883
Check out her daily web blog: Keep it Real in Sacramento
Pet Care | Real Estate | Restaurants | Tech | View All | * Add/Upgrade Business
Placer County News HeadlinesRocklin Flash Crime Report (2.13.16) Crime report digest summary for Rocklin for the period of February 1- 7, 2016.
Art Auction & Music Exhibition March 4th at BaysideRoseville, CA - The Eureka Union School District (EUSD), will host its 7th Annual Art Auction & Music Exhibition.
Roseville Wealth Advisor Pleads Guilty to FraudRoseville, CA- Lee Loomis, 58, of Granite Bay, recently pleaded guilty to wire fraud.
Roseville Night to Benefit Local Non-ProfitsRoseville, CA- On February 26th, residents can help support local non-profits in Roseville by taking in the Sacramento Kings and LA Clippers game.
American Heart Association: Placer County a Fit-Friendly WorksiteAUBURN, Calf. -- Placer County employees have happy hearts. Placer has been recognized by the American Heart Association as a Gold Fit-Friendly Worksite
Mom and Son with DisabilitiesMary Anne Fleury of Elizabeth, Colorado, has experienced disability from nearly every angle.
Roseville Flash Crime Report (2.10.16)Roseville, CA- Police activity and crime log digest summary for the period of February 3-9, 2016.
Roseville Region Gets Influx of Incoming U-HaulsRoseville, CA- The Roseville- Sacramento region ranks 2nd in the nation for incoming one-way truck rentals according to recent U-Haul news.
Placer SPCA Seeks Nominations for 2016 Hero AwardsRoseville, CA - Placer SPCA is seeking nominations for the 2016 Hero Awards, to be presented at the 15th annual Funny Bones Comedy & Awards Night
Placer County Moves Forward on Homelessness ApproachContinuing to address homelessness in Placer County and improve the quality of life for residents, the board of supervisors voted unanimously today to pursue a regional approach
Your Health: Not Getting Blood TestsIt is extremely unfortunate that most patients will not even think of going to a doctor until they have symptoms, which
2016 Housing Market UpdateRealtor, Julie Jalone, of MagnumOne Realty in Roseville writes about the housing market performance predictions presented by the chief economist of the National Association of Realtors at a recent conference.
NEWS: In Case You Missed It