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.
About Realtor Julie Jalone
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 HeadlinesVolvo XC90: Large, sophisticated SUVRoseville, CA,- There are plenty of reasons to be enamored with the 2018 Volvo XC90, a sophisticated luxury crossover sport utility vehicle
Seniors First Undergoing Leadership Change(Auburn, CA) - After stabilizing and expanding Seniors First, Placer County's only organization focused on programs and services for seniors, executive director Jamee Horning has
Moksa Brewing Up Seriously Delicious Craft Beers in RocklinRocklin, CA,- Derived from the word Moksha which equates with ultimate freedom and liberation in Indian philosophy and religion, we found ourselves perched in Rocklin, California at Moksa Brewing
BottleRock Presents Announces Concerts and Festival AftershowsNAPA, Calif. -- BottleRock Napa Valley, presented by JaM Cellars, has sold out all passes to the festival's sixth installment on May 25 - 27, 2018 in downtown Napa
Mesa Verde Country Top 5 Winter Experiences in Southwest ColoradoCortez, Colo. - Mesa Verde Country in Southwest Colorado is a great winter destination. The area boasts mountains, sunshine and everything travelers need for the perfect cold-weather getaway
BottleRock Presents Vines & VibesNapa, CA, - BottleRock Napa Valley presents Vines & Vibes, the fourth annual Do It For The Love Benefit Dinner and Concert on Thursday, May 24, 2018, on the rooftop of the Archer Hotel
2018 Lexus GX570 remains luxurious SUVRoseville, CA,- What most drivers will like about the 2018 Lexus LX570 is the combination of gracious around-town capability and its ability to go off-road in rugged winter conditions
Tree Harvest Cannabis Festival Cancelled, Fall Dates PossibleWoodland, CA- The cannabis themed Tree Harvest Festival scheduled for April 20- 22, 2018 has been cancelled due to a municipality withdrawing authorization
Roseville Gas Prices Ease SlightlyRoseville, CA- Gas prices in Roseville have eased slightly this past week despite the strong upward trend and anticipation of prices pushing toward the $4 gallon mark
Roseville City School District to Share $400,000 Grant(Roseville, CA) - Roseville City School District (RCSD) is poised to be the recipient of $400,000, all aimed to benefit its middle school students through
Kay U. Brooks presented with Don Poole AwardSacramento, CA,- Attorney Kay U. Brooks of Weintraub Tobin was recently awarded the Sacramento Region Community Foundation's prestigious Don Poole Award for her significant contributions
Arson Damage at Margaret Azevedo Park in RocklinRocklin, CA,- On February 17th 2018 at about 10:38 PM, Rocklin Police Officers responded to Margret Azevedo Park in the report of a play structure on fire
NEWS: In Case You Missed It