Well, happier anyway. All relationships have some struggles in trying to get everyone's needs met simultaneously, but sometimes compromises can be reached that make everyone happier. That's where the Federal Housing Administration (FHA) and condominium developments are going - putting aside old fears and resentments, bringing home flowers, and coming to a more amicable union.
FHA loans are a great option for some homebuyers as they require smaller down payments and usually have lower credit hurdles than other types of loans. It's also possible to use monetary gifts to pay for closing costs, and even roll the costs of renovations into the financing. However, there is a downside. FHA home loans have relatively low limits, and mortgage protection insurance can be more onerous than on a conventional loan.
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| Probably wouldn't qualify for FHA financing... |
Another consideration is that the FHA looks not only at the person who is doing the borrowing, but the property being purchased. Homes bought with FHA financing have to go through an FHA appraisal, which can be strict with its requirements. For instance, with other lenders you may be able to get by with a seller credit to replace the dying furnace, but the FHA will require the work actually be completed prior to loan approval. Also, it can be more difficult to finance a condominium due to regulations that govern the complex as a whole, not just the individual unit. It's really important to talk to a professional mortgage broker who can help you decide on the best option for your unique situation.
Some positive changes have been made recently that should help more potential homebuyers, specifically in regards to purchasing condominiums. In the past, FHA had strict rules about how many investors could own property in a condo development, and what percentage of the whole they could hold in order for the development to still qualify. The former remains the same; at least half of the units must be owner-occupied to get approval. However, now a single investor may own up to half of the units and the development will retain FHA certification, up from only 10% previously.
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| May allow for more business uses... |
Other significant changes have been introduced, with more promised. Condo complexes can now devote up to half of their space to non-residential commercial use, up from only 25%. In regards to delinquent HOA dues, FHA is now allowing up to 15% of the units to be 60 days delinquent, up from just 30 days. And while a lot of folks are struggling right now to make the mortgage payment and may not be as current with their homeowners dues, this could make the difference for some projects.
images: Robert Tewart, Jeremy Levine Design
I would love to help you with your real estate journey.
Please contact me at 303-917-7143 or robbin@stauferteam.com
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