FHA ends spot approval for Condos 2-01-2010! Now financing is more important than ever! It means more buyers for your condo! If you are on the FHA list.
The FHA spot approval process ends today. In the Metro New Orleans Market you can borrow up to $287,500 for a purchase of a condo or home used as a primary residence. The value of an FHA loan is the low down payment of 3.5% and the lower mortgage insurance fees. The interest rates are generally the same as a conventional loan. The VA loan generally follows the FHA list as well.
Most of the condos that I sell will no longer qualify for the FHA loan unless they are on the approved list. Few associations have been added to the list in the last ten years. With easy money it was not needed. Times have changed and many companies will not lend on condos unless you have 20% to put down. This will slow sales and end up decreasing values in certain segments of the condo market. This is the under 300k market.
If you live in such an association where most of the sales are under 300k you need to ask the management company and the homeowners association to look into getting you condo association to be put on the list. Its not an easy process and takes at least two months. Why Would you want your HOA to pursue this ?
The condos will be easier to sell. On a 200 k condo not everyone has 40 k as a down payment. Many very good buyers do have 7 k.
The first time home buyers are being shut out of the market. Condos are are great place for many to start as a first home. This is a very large segment of the condo market. Home prices do let let many start of with homes. This is especially true in the City of New Orleans.
You can have something that your competition may not have if your association does get on the list. It gives you an edge on pricing!
You will hear all kinds of excuses and reasons why someone does not want the association on the list. Most reasons are crazy. Its money and value in your pocket. It is not real simple and requires a lot of paperwork.
The prices will be better if you have more viable buyers! You will have more demand. Supply and demand is alive and well.
You as the owners have to push this now ! Buyers cannot wait for the process to be completed. They will be gone ! The certainty of the FHA loan needs to be there for the prospective buyer.
You the value of you condo. need to be proactive if you own a condo and get you condo association and management company to look into the FHA approval process. Everyone should want the advantages when you are ready to sell. Times have changed and this is well worth looking into for increasing the value of your property. Ask the questions ? Here is a link to see if your condo association is FHA approved. FHA Condo Approved?