Brand New Rules For Getting a FHA Loan on Condo’s and Townhomes is a post from: FHA,VA and Conventional Home Loans in all 50 States

FHA has gone back and forth for months on implementing new guidelines for lenders that are making FHA loans on condos and townhomes.  These rules have very powerful implications for the entire U.S. condo market, as FHA is becoming the #1 source of financing for home buyers in the U.S.

The latest rules from FHA are temporary for through the next year as a response to the current housing situation in the U.S.  Here is a summary of some of the changes they have made.  These changes will help more condo projects qualify for FHA loans:

1.  Condo “spot approvals” are still available through February 2010 

This is a very important extension.  Condo projects that are not already on the FHA approved condo list need to either get on the list or get a “spot approval” for the single unit a borrower is trying to buy.  This extension allows FHA buyers to get a condo they want to buy approved even if not on the FHA approved condo list.  Getting the project on the FHA approved condo list is a more involved process than just getting a “spot approval” Please call or email if you have questions about spot approvals.

2. FHA will now allow 50% of all the condo units to have FHA loans on them, in some cases 100% 

Previously FHA was only allowing 30% of all units to have FHA loans.

3.  New condo developments only 50% of *pre-sold* condo need to be owner-occupied or intended to be owner occupied 

FHA still has a rule where 50% or more of the units have to be owner occupied.  With new condo developments where the entire projects have not sold out yet, only 50% of the units sold so far have to be owner occupied or intended to be owner occupied.

4.  REO/Bank Owned properties that are vacant or tenant-occupied are not counted in the owner-occupancy figures 

This is important because as stated above, the #1 rule the prevents FHA from financing condo units is that less than 50% of the condo units in a project are owner occupied.  This exception will not count REO/bank owned units in these figures and will thus help condo projects with a lot of bank owned properties pass the occupancy % test.

So there you have it, so very recent changes from FHA regarding condo loans.   These changes will help more buyers get into condo’s using FHA loans.  There is a lot more to FHA condo approvals as they can be very complicated.

Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a FHA Loan.

Warmest Regards,

Rob Chomentowski

Sr. Loan Officer (and FHA specialist)

858-922-7899

homeloan8@gmail.com

Related posts:

1. You Don’t Have to Be a U.S. Citizen To Apply For a FHA Loan
2. Today’s Realities on Getting a FHA Loan on a Condo or Townhome

Top Myths About FHA Government Home Loans is a post from: FHA,VA and Conventional Home Loans in all 50 States

There are a lot of myths out there about FHA Home Loans out there that are NOT correct.  A lot of these myths are put out there by Realtors representing sellers (especially on banked owner REO’s) who really don’t understand FHA Loans.

Myth #1 FHA Loans Are Only for First Time Home Buyers:

Anyone can get a FHA Loan; you do NOT have to be a first time home buyer.  But you can only have one FHA Loan at a time and you can only get an FHA Loan on a primary residence.

Myth #2 FHA Loans take more time processing:

FHA Loans do NOT take any more time to process than a conventional loan.   There is nothing about them that would take them any more time to process than a conventional loan.   You can close on your new house with a FHA Loan just as fast as or faster than if you were to get a conventional loan.

Myth #3 More paperwork is required

There is no more paperwork involved in a FHA Loan then a conventional loan.  Both will require standard income, asset, property and credit documentation.

Myth #4 Interest Rates are Higher on FHA Loans

Interest rates on 30 year fixed FHA Loans are just as competitive as conventional loans, if not sometimes better.  In fact FHA does not penalize borrowers for lower credit scores as much as conventional loans do.

Myth #5  FHA Loans Are Too Restrictive

The opposite is actually true!  FHA Loans have more flexible credit and asset guidelines then conventional loans, (especially when a borrower is putting less than 20% down on a conventional loan).  Also, FHA Loans also still allow the mortgage company to choose the appraiser.  This means you are more likely to get an appraisal done by a local professional vs. conventional loans that require appraisals through the HVCC process which often assigns inexperienced out-of-area appraisers working for low wages.

Myth #6  FHA Loans Require Termite Clearance Reports

If the buyer does not ask for a pest inspection in the purchase contract, they will not be required to get a clearance for a FHA loan. 

Myth #7  FHA Loans Have Low Limits on Maximum Loan Amounts

You can get an FHA Loan all the way up to $729,750 in many areas of the county.  This is the same as the upper limit for conventional loans.

So there you have it.  Seven Myths about FHA Loans that are not true!  Please don’t hesitate to call if you have any questions.

Warm Regards,

Rob Chomentowski

Sr. Loan Officer (and FHA specialist)

rob@affinity-financial.com

858-922-7899 (direct)

Related posts:

1. FHA Loans and Termite Work
2. California Offers Own $10,000 Home Buyer Tax Credit On Top Of Federal Credit
3. U.S. FHA to apply $8,000 credit to home buying costs