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smartmoney wrote:
"Gathering the items on the list may take longer than how long it takes for HUD to approve the condo....."
^^^ This
if you look up the condo on the hud.gov site it will tell you if it's expired or if it was rejected. if the condo was rejected there is sometimes a link to a more detailed explanation- or list of missing documentation.
smartmoney wrote:
"Gathering the items on the list may take longer than how long it takes for HUD to approve the condo....."
^^^ This
if you look up the condo on the hud.gov site it will tell you if it's expired or if it was rejected. if the condo was rejected there is sometimes a link to a more detailed explanation- or list of missing documentation.
The first thing one must do on this site is ask: "is this still the case?" Things constantly change in this world. If one is buying a condo owner occupied and putting 10% down or more, there's a good chance occupancy ratios won't be a primary criteria (but will add to the "layered risk" equation). The most important thing is to find someone in your area that is familiar with condo - both as an agent and a loan officer.
As the mortgage world has become more complex, condos continue to befuddle even the most experienced in the industry. Where else can a condo be okay on the 1st of the month, but no good the 2nd? It's not like it's expired food. And the sad part about all this, the buyer can shell out not-so-chump-change for the home inspection ($450 & done first), the appraisal ($450 & ordered at loan app), only to find out from the condo questionnaire ($125 & ordered prior to submission) and budget and financials ($25-$50 & ordered prior to submission) the condo is not warrantable (meaning Fannie or Freddie won't purchase the loan). $1000 spent to find out financing is not available. Also, if you are an investor, the criteria (owner occupancy, multi owners) will be held to a strict standard.
I have totally reversed my approach to condos and now recommend a reverse process to my agents. Once their buyers have identified a condo project they really want or even after they make an offer, I run the questionnaire before the home inspection is even done. This puts the minimum expense first. It isn't 100% fool proof (because the full credit package must be known for conventional condo), but it does eliminate those obvious reasons that would disqualify a condo project. Obvious reasons include, inadequate reserves in the budget, > 15% delinquency rates, lack of a 1M fidelity policy for the BOD, or pending litigation.
I don't know about the rest of the world, but in the DC area we are seeing TH condos dominate regular townhomes. By the end of 2014, I think the TH category in my area will be left in the dust.....and what is sad, the new home developments market them as townhouses on the road signage....when viewing the homes, we had to ask. (not sure about print ads) But get ready metro areas, condos are coming.
Since there seems to be a trend in condo's of buyer's inability to get financing due to out of proportion tenant to owner ratio's....I, who am selling a condo, am thinking of holding a SMALL mortgage....they would have to put a considerable amount down. I've been researching it...but would be interested to hear what people think.
thanks
I am in Florida
Part of the problem for this condo is that the complex is on the water and it is a mixed bag of year round owners, snowbirds, tenants, and weekly vacationers. I think this limits the mortgage availability even further.
People with a considerable amount to put down typically aren't going to be going after a condo, unless it's in a highly desirable area or they have serious issues getting financing. There are just too many good deals in FL with little or nothing down. You need to decide if you are willing to hold the note for a very long time.
People with a considerable amount to put down typically aren't going to be going after a condo, unless it's in a highly desirable area or they have serious issues getting financing. There are just too many good deals in FL with little or nothing down. You need to decide if you are willing to hold the note for a very long time.
Smartmoney, I rarely disagree with you, but in this case, I'm not at all sure that you are correct. Florida has a huge appeal to snowbirds, who often (usualy?) prefer a condo vs an SFR. It's not just a question of money - it's the lifestyle choice of 'lock and leave.' It's that most snowbirds are older and no longer want tge outsude maitenance. It's the ocean views that are often unattainable in a SFR.
It's a florida coast exception that's not likely to occur in other markets.
Very curious if anyone knows if there happens to be a "link" on HOA's providing information on the Owner occupancy ratio for Las Vegas condos? Thank you in advance for your assistance!
Here you go - make sure to put the state and then only about the first five letters of the condo name and hit enter. If too many come up, add letters on at a time - the system is hypersensitive and will eliminate an approved condo with even a minor variation. (Keep status at "all."). Don't enter dates.
To answer your question: "How long does it take for a condo to become FHA approved?"
There is a lengthy list, most readily available in the HOA docs, some needing signatures from the current HOA BOD to be gathered. Gathering the items on the list may take longer than how long it takes for HUD to approve the condo. FHA/HUD states they will review the submission within 30 days. That is called an HRAP when HUD reviews/approves the documents. If it's not approved, they will tell you what is missing and you can resubmit (and not have to wait 30 days again, more like one or two days). There are also lenders (banks) out there that will approve the condos (using the same checklist) and take the responsibility of the approval (because every bank can use that approval issued). That process is called a DELRAP, because it's a delegated approval.
There are contract processors out there that do nothing but submit condo approvals to HUD - it's a highly specialized area of mortgage banking. You (or someone) can expect to pay $700 to $2500+ for this service. Your best (cheapest) bet is to find a mortgage lender that does DELRAP. Find a seller willing to work with you may be difficult too, just too many are opting for conventional financing.
My condo complex is 35 years old and we have never been FHA approved. Remember in smaller complex, mine is 30 units the Treasurer or President has to process all that paperwork to make place FHA eligible and every time a unit sells it happens again.
In return the association may see higher resale prices. However, the Association may also end up with higher property taxes based on those higher resale prices and get a lot of 3 or 5% down mortgages which will most likely default in next recession. Leaving buildings foreclosures and arrears.
All the banks will give mortgages on my condo at same rate or better than Fannie or Freddie. We have good financials. However since banks keep it on their books they are looking for a minimum of 20% down. Our board likes it as it gives folks 20% equity on day one. It also slows folks down from sucking home equity out of units. And the older folks who plan to go "feet first" out of units care less about sales prices and more about property taxes anyhow.
I have a fiduciary responsibility to the condo owners. And I see the benefits to FHA I also see the issues.
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