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I bet my former boss in NC is VERY GLAD to have retired when he did, then. He specialized in condos, sold as second homes/retirement homes that were rented in the interim/investment properties.
There will be a lot of folks impacted by this rule and it is a VERY GOOD thing that you have brought this to folks attention!
Don't buy a condo. Yesterday new federal rules went into effect that make it very hard to sell condo. The condo association has to be approved for an FHA loan. Every single resident has to be paid up for a buyer to be able to purchase one of the units. In this economy just one delinquent resident can prevent any resident from selling.
Wait - hold everything, let me clarify.
Any rule changes are only for condos which are to be financed using FHA financing, if the buyer pays cash or using conventional financing there are no changes. Buyers typically choose FHA because of the low down payment option (as little as 3.5%) and the looser credit standards that are required from conventional financing. During this last cycle it has become a dominant player again.
In additional, FHA is still accepting spot approvals through the end of this month, if the association is not on the approved list. This deadline has already been pushed back several times. What that means is that if the association is not on the FHA approved list, the lender can obtain a "spot approval" for the specific unit that is under contract without having the association qualify. Replacing spot approvals is an entirely new process called Direct Endorsement Lender Review and Approval Process (DELRA), another way for a lender to get individual approval on a condo without the entire association being on the list.
For a condo association to be on the FHA approved list, it must meet the following:
*50% of the units must be owner occupied or sold to owner who intend to occupy (for projects yet to be completed).
*Projects must be covered by liability, hazard (and if necessary) flood insurance
*For projects under completion, 50% of the units must be sold or have a sales contract in place
*No more than 15% of units may be in arrears with association dues (more than 30 days past due)
*A Reserve Study (every 12 months) must show that the association has "adequate funds" for capital improvements, typically 10% of the annual operating budget
*No more than 10% of the project can be owned by one investor
It has become more difficult than in previous years to finance a condominium purchase, however it's not impossible. If you own a unit, you might want to check to see if your association is already on the FHA approved list and if you're in the market for a unit, check to see the association's current status and plan accordingly, as a spot or DELRA approval will add several days to the process or kill the deal. Those projects to watch out for are very small associations (multi unit conversions). Many 2, 3 or 4 unit buidlings were converted to condominiums earlier this decade. If one of those units is delinquent or the association doesn't have adequate reserves, the purchase may be doomed.
So after almost four months of planning and interviewing, I have decided to Move to Maine in 2010.
I am a physican who basically trained in NYC and has been doing further training in Connecticut.
I am going to accept an offer at St Mary's health in Lewiston, Maine. I know it's not prefect but I like it and think it will be a good place to set myself up for the next three of four years atleast.
My Problem: housing.
So there is no way I am gonna buy or invest in a house till I spend a year getting to know the place enough.
I will be coming up there with someone who I plan to marry and looked at rentals. They are well priced (compared to NYC ofcourse!!), but really thought they were small.
Now I do know there are a lot of condos that a lot of people are trying to sell, but as house prices are falling it has gotten harder and I am counting on people who own these larger, well built condos, may be ready to rent them for a year to kinda help with their losses.
I wont be moving up till the end to July. I know this makes it hard as the housing market could change in the next six months.
I was hoping that if anyone knew of people who may be interested in renting their condos in the lewiston-auburn area in the next six months, to keep me in mind.
Being a physican, and my other half a nurse, I think we make a very reliable tenants. However there will be a ten year old cat involoved (sigh, not mine, buy apparently it comes with the wife package...what can I say).
So if anyone knows someone who may be interested, I did looks at a few condos from the outside and would love to try and make a connection.
Thanks everyone, you all have been great in guiding my to this decision to move up there.....
Oh and on a completely different topic...if you had to choose between a chevy Avalanche or a Honda Ridgeline....what would you pick.......as much as I am certain that it is the "offical state car"......I refuse to buy a subaru..don't ask why....lol
thanks all
Mike
Mike, for what it's worth I am just going to advise you to NOT live in Lewiston. I hate to say it but its social ills became truly pathological a long time ago (imho). Just watch the news or read the paper for a few weeks and you'll know what I mean. Auburn would probably be a bit better.
To move to Maine and live in Lewiston defeats the whole purpose (again, imho).
Mike, for what it's worth I am just going to advise you to NOT live in Lewiston. I hate to say it but its social ills became truly pathological a long time ago (imho). Just watch the news or read the paper for a few weeks and you'll know what I mean. Auburn would probably be a bit better.
To move to Maine and live in Lewiston defeats the whole purpose (again, imho).
From the stories that keep cropping up, I wouldn't move anywhere even near Lewiston.
As someone who's witnessed neighborhoods change down here in the NYC and Long Island area, things almost always get worse once the problems start.
Just search Google using criteria like the following:
I live close to Lewiston and have been there umpteen times for business and pleasure-restaurants, antiquing, frame supplies and so on.
Never once have I had a problem-never. Just like any other small city, one must be aware of their surroundings and familiarize themselves with the good vs bad areas.
Lewiston hospitals are some of the best in Maine.
You might want to look into renting a house. I rented a three bedroom with 2 car garage in a nice area of Auburn for a couple of years and had a dog. The price was pretty reasonable also. I would also go with the Avalanche. I know a lot of people that have there Chevy trucks for years and lots of miles. They also hold up a lot better to rust than the Japanese versions.
So after almost four months of planning and interviewing, I have decided to Move to Maine in 2010.
I am a physican who basically trained in NYC and has been doing further training in Connecticut.
I am going to accept an offer at St Mary's health in Lewiston, Maine. I know it's not prefect but I like it and think it will be a good place to set myself up for the next three of four years atleast.
My Problem: housing.
So there is no way I am gonna buy or invest in a house till I spend a year getting to know the place enough.
I will be coming up there with someone who I plan to marry and looked at rentals. They are well priced (compared to NYC ofcourse!!), but really thought they were small.
Now I do know there are a lot of condos that a lot of people are trying to sell, but as house prices are falling it has gotten harder and I am counting on people who own these larger, well built condos, may be ready to rent them for a year to kinda help with their losses.
I wont be moving up till the end to July. I know this makes it hard as the housing market could change in the next six months.
I was hoping that if anyone knew of people who may be interested in renting their condos in the lewiston-auburn area in the next six months, to keep me in mind.
Being a physican, and my other half a nurse, I think we make a very reliable tenants. However there will be a ten year old cat involoved (sigh, not mine, buy apparently it comes with the wife package...what can I say).
So if anyone knows someone who may be interested, I did looks at a few condos from the outside and would love to try and make a connection.
Thanks everyone, you all have been great in guiding my to this decision to move up there.....
Oh and on a completely different topic...if you had to choose between a chevy Avalanche or a Honda Ridgeline....what would you pick.......as much as I am certain that it is the "offical state car"......I refuse to buy a subaru..don't ask why....lol
thanks all
Mike
If I understand you correctly, you are being hired as a hospitalist? It seems to me that the best advice that you can get regarding housing will probably come from the practice manager in the hospital...the person to whom you report. Ask him/her about rental/living situations and ask what they recommend. They probably have a program already established for you to use that will help you with location, moving details and financing as necessary.
At least that it the way hospitals used to work when new physicians came to Maine. I had clients back in the days who moved to Maine, and their families were moved into a new home already waiting and prepared for them. All they had to do was sign a few documents and go to work.
For a condo association to be on the FHA approved list, it must meet the following:
*50% of the units must be owner occupied or sold to owner who intend to occupy (for projects yet to be completed).
*Projects must be covered by liability, hazard (and if necessary) flood insurance
*For projects under completion, 50% of the units must be sold or have a sales contract in place
*No more than 15% of units may be in arrears with association dues (more than 30 days past due)
*A Reserve Study (every 12 months) must show that the association has "adequate funds" for capital improvements, typically 10% of the annual operating budget
*No more than 10% of the project can be owned by one investor
All of these requirements are both good for the bank and the buyer..
are condo associations responsible for gathering this information and trying to get themselves on this list as i would expect it would benifit everyone?
What are the effects of a situation when your making an offer pre aproved through FHA and the associations is NOT on this list.. If the seller gets a mulitple offers I could see where using FHA loans could work against you?
Thank you so much for all your helpful replies, I think that I am gonna use that whole swap a lease online sites to get out of my honda lease and most likely go with the Avalanche.....just get kinda scared buying American......but love the look. More than likely I will look at condos to RENT in Auburn if I can find them....but again, THANKS SO MUCH FOR ALL THE REPLIES.....I feel Welcomed already.....and as for Lewiston and Crime? I am not gonna be over confident.....and have to admit these two years in CT have dulled my reflexes a bit but the first three years in the US, was me living in the South Bronx.......so needless to say I grew eyes on the back of my head real fast....and then moved to Jackson heights in Queens....also one of those places where you really have to have that sixth sense ON. My First real job was at a hospital in North Brooklyn and I used to be able to hold my own.........but like I said, not going to be over confident. I am older....slower...and am going up there with a wonderful girl I would like to marry...so really would like to have a Safe place...so will take all your advise to heart.
One last question from a guy whose folks are originally from India.....so a wonderful lady that this adorable Bed and Breakfast place on Ware street, told me that Lewiston had a new Indian restaurant......anyone know if there is an Indian Store?? I know it's reaching....but hey, the girl I am with is not Indian, and it would be nice to pick up some stuff so I could try and impress her with some indian cooking......I hope..lol
Thanks guys.....
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FHA and Condominiums
