Tuesday, July 30, 2013

May Be Able To Get FHA Loan in Non Approved Condo Complex....Maybe

Any FHA buyer that was looking for a condo or townhouse in the last couple of years has really struggled. More and more condo complexes lost their FHA certification. And, that made it extremely hard for a home buyer and much easier for an all cash investor to buy the units for sale.

Some buyers were able to bump up to 5% conventional financing. But even then, not all complexes would allow a 95% LTV due to other underlying concerns. Not enough in reserves, too high of a rental to owner-occupied ratio.

But, FHA has proposed a 'Workaround' to some of the problems with re-certification for FHA approval on a condo complex.

The National Housing Act regarding 'transient' , or short-term rental of units, language in the certification has created part of this problem. And, FHA is considering a solution to this dilemma. The HOA boards can either amend their CC& R's, an extremely costly and time consuming endeavor, or provide a statement that confirms there are 'No units in the project currently rented for less than 30 days and/or pursuant to the lessor providing any services normally associated with a hotel'

Now, not saying that will correct every situation by far. As, with any one group or person, no one really likes being told what they have to do. But, FHA was meant to help people get into homes. Their certification, and re-certification, process has been hindering a lot of the potential condo home buyers...the ones that FHA was set up to help....so here's to hoping this is a step in the right direction of re-certifying local complexes for FHA buyers!

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