Articles Tagged With: FHA Condo Loan

November 16, 2015

Temporary FHA Guidance Eases Condo Project Approval Requirements

The FHA has issued a press release announcing temporary guidance that will make it easier to get a condo project added to the approved list for an FHA mortgage loan. According to HUDNo.15-145, the FHA/HUD, “published new guidelines under its condominium approval process intended to increase affordable housing options for first-time and low- to moderate-income homebuyers. Effective immediately, FHAs temporary guidance will streamline the agencys condominium recertification process and expand the eligibility of acceptable owner-occupied units to include second homes that are not investor-owned.” These new guidelines, the FHA press release says, will be in effect for one year, and will “serve to revise FHAs condominium approval process until the agency can implement a more comprehensive condominium rule change.” The new guidance, issued on the FHA/HUD official site on November | more...

August 5, 2015

FHA Condo Loans: Site Condos and Manufactured Housing Condo Projects

By Joe Wallace

In our last post we discussed basic eligibility rules for FHA condo loans–a condo project must be on or added to the FHA approved list in order to be approved for an FHA mortgage. But there are additional rules in some cases. For example, site condo projects don’t require being added to the FHA approval list IF those condo projects meet certain requirements. These requirements may vary depending on the nature of the condo project, state law, and other factors. The FHA condo project requirements are found in a PDF file you can download directly from the FHA/HUD official site. It contains the following provisions for site condos: Condominium project approval is not required for Site Condominiums meeting all of the below defined requirements. Site Condominiums are defined as: –Single | more...

August 5, 2015

FHA Condo Loans: Eligibility Rules For Adding Condo Projects To The FHA Approved List

By Joe Wallace

We get frequent questions about FHA condo loans–are they available? What are the rules? It is true that FHA mortgage loans are available for condos, town homes and other properties that aren’t typical suburban homes. Condo loans have special rules due to the unique nature of these building projects. The communal residency issues associated with condos (homeowner associations, shared roof repair costs and related upkeep issues, for example) requires any condo project for consideration for an FHA mortgage loan to conform with certain guidelines, which is why all condo projects must be on or added to the FHA approved list before a home loan can be approved for a unit in that project. How does a condo get added to the FHA approved list? Before any decisions can be made, | more...

May 2, 2015

FHA Loan Reader Questions: Septic Tanks, Condo Loan Rules

By Joe Wallace

We have two questions today that are linked by a common answer. The first question: “Isabela, PR (00662). what is HUD/FHA requirement regarding septic tank covered with grass. the complete back yard, including septic tank is covered. I am undergoing a HARP refinance…” The answer to this question depends on what the state/local code requirements are for septic tanks. FHA loan rules include a requirement that septic systems meet the approval of the local authority. If you contact the FHA directly by calling their toll-free number, you will learn that the FHA does not–and cannot–maintain archives of all state and local building codes across the United States. A borrower who needs information like this should contact the local authority to learn what the rules might be. The second reader question: | more...

November 24, 2014

FHA Condo Approval Rules: A Reader Question

By Joe Wallace

A reader got in touch recently with a lengthy question, asking: “Our HOA board is considering revising our declaration dated 4/06/84. Our building was built in 1960 as an 11 story apartment building and transformed into a condo building in 1984. There are 50 units in the building– approximately 27 percent are rental properties. Our building has FHA certification. As units are sold, investors buy them as rental units.” “We would like to reverse this trend by revising our declaration to state that as units are sold, they are sold as owner occupied units. The revised declaration would provide that owners could obtain a temporary rental permit from the HOA board enabling the owner to rent two years within a five year period. Also new owners must occupy their unit | more...

October 20, 2014

Basic FHA Condo Loan Rules

By Joe Wallace

If you’ve never considered owning or purchasing a condo unit before, you might be surprised to learn that the FHA single-family loan program does permit the purchase of approved condo units with an FHA loan. The rules for condo loans are different than for traditional single family houses because of the shared nature of the property, so borrowers should become familiar with the FHA requirements for condo loans. To begin with, what does the FHA classify as a condo? Take a look at the image above–could these houses be classified as condos? It depends partially on the nature of the housing market. In Chicago, for example, a house split into more than one dwelling could classify as a condo project if it meets certain FHA parameters–and in Chicago, such modifications | more...

April 10, 2014

FHA Loan Reader Questions: What’s The Definition of a Condominium?

By Joe Wallace

A reader asks, “How can a person go about proving that a particular development is not a condo development? Realtors and others in our area typically call any attached housing development ‘condos’ when they are looking to sell them.” “I am specifically looking at a neighborhood of attached sing-story homes that has a HOA, charges fees for common maintenance, but when you buy a unit you also buy the ground under the unit, and an undivided percentage of the common area. The developer declares they are townhomes and not condos.” This can be a tricky question to answer for a variety of reasons, including the fact that state and/or local laws might come into play in these cases. FHA loan rules alone may not be enough to get the whole | more...

March 18, 2014

FHA Loan Rules: Condominiums

By Joe Wallace

FHA loan rules permit single-family mortgages on suburban homes, mixed-use properties that meet FHA loan requirements, townhomes and condominiums. For a condo to qualify for an FHA mortgage, it must be on or be added to a list of FHA approved condo projects. But some borrowers aren’t sure what constitutes a condominium–what do FHA loan rules recognize as a condo unit as opposed to other types of property? As stated above, FHA requires condo units to be approved. The rulebooks states, “FHA must approve condominium projects before a mortgage on an individual condominium unit can be insured.” The rules for FHA loans on what constitutes a condo are found in HUD 4155.1, Chapter Four Section B under the heading “Requirements For Condominium Eligibility”. Those rules begin by stating: “A condominium | more...

February 25, 2014

FHA Home Loans: What The FHA Will And Won’t Approve

By Joe Wallace

If you’re looking for an FHA guaranteed home loan, it can be a very big help to know in advance what kinds of properties the FHA will and won’t approve loans for in its single-family home loan program. There are sometimes misconceptions about the FHA single-family home loan program; some borrowers are interested in loans for commercial buildings or properties, but single-family home loans are intended for purchasing a dwelling for the borrower’s personal use. The FHA’s list of approved and unapproved uses for an FHA mortgage make it fairly obvious how these loans can be used, but if you’re new to the program those details aren’t always as clear. You can save a lot of time knowing up front what’s allowed under the FHA mortgage program. The rules for | more...

December 19, 2013

FHA Loan Closing Costs: A Reader Question

By Joe Wallace

A reader asks, “My husband and I are trying to buy a home. We have the 3-3.5% down required, I have $1500.00 for the realtor earnest money, the appraisal and the inspection. Is that all the money I will need up front. We are asking seller to pay closing. Since we can ask them that 6% goes to pay to closing. SO, if seller pays closing. I have money for the down payment, earnest money, appraisal and inspection- that will be all I need, correct?” It’s difficult to answer a question like this because every loan is unique. Some home loan purchases may require a flood zone determination, there may be certain legal fees if the borrower has paid for certain title services, state laws and tax code may apply, | more...