You Condo Needs to be FHA Approved
By Shailesh Ghimire, May 12, 2008 at 2:12 pmWith all the press FHA loans has garnered recently we have received quite a bit of inquiry on this government insured mortgage. We have been able to qualify most who have contacted us, however, we’ve had to disappoint a few. The crazy thing is the reason for denial wasn’t even something related to the borrower. It was entirely based on the property they were seeking to mortgage. While there are relatively few property related hurdles for single family homes, when it comes to condominiums and FHA it’s a different story entirely.
Basically, it boils down to the condo itself being FHA approved. So, if you are thinking of purchasing a condo or refinancing a mortgage on a condo, and would like to use the FHA loan program, the first thing you need to do is make sure it is FHA approved. The loan goes nowhere if the condo in question is not on the FHA approved list. To help you the HUD maintains a master list on its website, but to be double sure, I suggest contacting a FHA approved lender.
If you are curious about what qualifies a condo for FHA approval, the Mortgage Porter has written a fantastic post on this topic. Here are some of the requirements she highlights from the FHA guideline:
1. At least 51% of the total units in the project must be owner occupied.
2. At least 90% of the total units in the project have been sold.
3. No single entity owns more than 10% of the total units in the project.
4. The project, including common areas, is complete with no special assessments and no legal actions pending.
5. The owners association has a reserve plan and a reserve fund , separate from the operating account that is adequate to prevent deferred maintenance
Feel free to contact me if you have a particular property in mind and want to find out if it is FHA approved.
Welcome to the Arizona Mortgage Guru blog, a great resource for all your home financing needs. If you're new here and like the content, you can subscribe to my RSS feed to get regular updates on all things related to mortgages. Thanks for visiting.
4 Responses to “You Condo Needs to be FHA Approved”
Great info.. Thanks! The “90% of the total units in the project have been sold” criteria hurts most of the guys that were too late to the condo conversion craze. I believe the owner occupancy requirements use to be much higher. If you don’t mind, I’ll give you a call this week to check on a complex in Dobson Ranch.
Nick - sounds good. You can call either me or Aimee.
Thanks,
I would like to know if the Casa de Amigos Condomimiun Development in Scottsdale, AZ 85257 can be approved for an FHA AmeriDream program? I know the requirements for the FHA approval but how can I find out what is denying this complex the approval? Thank you….Wayne
Great info on fha Condos
Care to comment?