January 14, 2011
FHA loans come in many different types. Not all house hunters want the same thing from their FHA mortgages, and FHA planners have anticipated this by creating many different options for those who want to borrow money with an FHA-insured loan.
Those options are not limited to the terms and conditions of the FHA loan itself. There are many different types of properties a potential home owner can include on the search for a new home. The typical suburban home is just one option. Some buyers want the house, the yard, and the driveway. But what about those who live in the city?
The FHA offers guaranteed loans for condominium units as well as traditional houses. FHA condo loans are a bit more involved than a typical home purchase, but that shouldn’t deter a buyer for going after the type of property they really want to own.
FHA condo loans differ from their suburban home counterparts because a condominium project must be FHA-approved before a buyer can apply to purchase one of the units. According to FHA requirements, there are two ways these projects may be approved; one is the HUD Review and Approval Process or HRAP. The other is the “Direct Endorsement Lender Review and Approval Process (DELRAP) for lenders with unconditional Direct Endorsement authority and qualified staff for reviewing and approving condominium projects,” according to the FHA official site.
FHA loan applicants don’t want to waste a lot of time looking for condos for sale when it’s not clear whether those units would be approved for an FHA mortgage loan; that is one reason why the FHA provides a handy search tool to locate FHA-approved units in the area.
That’s not to say that a project that is currently unapproved might not become approved at some point–the buyer can always work with the lender on that issue to see what can be done. But for those who want to start their search with existing properties with approval, the condo search tool is an excellent way to start.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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