FHA-Insured Loans for a Condo Unit? Maybe, Maybe Not

Back in the good old days (aka, pre-2008-09 financial collapse), a buyer with good credit could buy a condominium unit with less than 20% down by relying on private mortgage insurance. These days all we have are our memories.

As a seller, it is not enough to find a buyer willing to pay an acceptable purchase price.  First, mortgage lenders have to be satisfied with the appraisal of the condo unit.  I've written previously about the problems with appraisals today and it's negative impact on transactions.

Second, the buyer has to come up with an adequate down payment.  Many buyers have the cash flow to handle the mortgage payment but coming up with a big enough down payment can be a challenge. 

One way out of the wilderness is for the condominium development to seek approval with HUD for FHA-insured financing. As an FHA-approved condominium, buyers of units in the approved condominium development can obtain FHA-insured acquisition financing with its lower down payment requirements.

Recently, the FHA changed its rules for condominiums, who must now recertify 2 years as an FHA-approved development.  The application to recertify must be made within 6 month of the condo's current expiration date. A failure to timely reapply will result in having to go through the full application process.

For more information, click here to search the FHA web site for condominium projects that have applied, including both approved and rejected applications.  Click here to access HUD's Condominium Project Approval and Processing Guide.


house and lot for sale in bulacan said...

This is definitely a blog worth following. You’ve got a great deal to say about this subject, and so much knowledge.


philippines properties for sale said...

Appealing information you have provided. It gained me more knowledge and idea. Please keep up the good because i like the way you are writing. Thanks!


Zumi said...

I had a great time reading your blog and I learned a lot of things from your post. Loans for a condo unit is also ideal and I think a big help for those who can afford to buy an investment like this in cash.

RES Course Provider said...

I would be very thankful if you continue with quality what you are serving right now with your blog…I really enjoyed it…and i really appreciate to you for this….its always pleasure to read so….Thanks for sharing!!

Sharon Bush said...

Fantastic Job. Appropriate content & quality written. Looking forward to read more you :).

Real Estate said...

Nice looking blog site. I actually love this kind of blog so far. And I visit your blog regularly. I wish I will create this kind of blog very soon. Thanks for sharing your blog's new article.