You can use an FHA-backed loan to finance a condominium, but only in you live in an FHA-approved condo. Condo property values tend to fluctuate more than other types of real estate, and, consequently, lenders and insurers, like the FHA, only finance or insure mortgages on condos that meet certain guidelines.
The new FHA requirements, announced in a recent letter to lenders, new FHA guidelines in part to streamline the condominium certification.
II. WHY IS IT IMPORTANT TO HAVE FHA APPROVAL FOR YOUR CONDOMINIUM ASSOCIATION III. CLASSIFICATIONS OF CONDOMINIUM ASSOCIATION CERTIFICATION IV. WHAT STEPS MUST A CONDOMINIUM ASSOCIATION TAKE TO BECOME FHA CERTIFIED a. What Requirements Must a Condominium Association Meet Before Applying for FHA financing b.
But if a condo building is not certified as eligible for financing by FHA, onerous recertification requirements, have never sought to reapply.
FHA-approved condo requirements. Have no more than 15% of the total units more than 30 days past due on their condo association dues payments. Allocate at least 10% of their budget to a reserves account to be used maintaining the common areas carry adequate hazard, flood, liability and other insurance. Essentially,
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FHA working on plan to approve more condo mortgages. and a five-year approval period for project certification.. "We've been in the process of revising our condominium project approval requirements to get to a final rule.
· minimum owner-occupancy requirements. FHA currently requires that approved condominium developments have a minimum of 50 percent of the units occupied by owners. While having too few owner-occupants can detract from the viability of.
FHA mortgage rates for condos. However, their mortgage insurance requirement of 1.75 percent upfront and a monthly amount that varies according to your loan term pushes the actual cost higher. When you compare FHA condo loans with other programs, include the mortgage insurance in your calculations.
and a long list of other requirements. Thousands of condo associations dropped out of the fha certification process after the obama administration imposed regulations that were considered overly.
leading to the drastic drop in certification requests and condo eligibility. Bottom line for unit owners, sellers and buyers: If an FHA loan figures in your plans, first check with the association.
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