Up until now, Condo projects were either already approved and listed on HUD’s website for FHA financing, or they could be “spot approved” for FHA loans, meaning the lender could get evidence that the Condo project met FHA guidelines and approve a loan on one of the units. This did not approve the whole project through HUD though, so the next time someone wanted to get an FHA loan on a unit in the same project, they also had to go through the “spot approval” process.
Under the new rules, FHA lenders will have the authority to actually approve a whole Condominium project for HUD. This means that “spot approvals” will be eliminated. Once a loan is done on a unit in a development, it will be added to the HUD approved list and future FHA loans in the project will be easier to do.
All current Condominium project approval will be invalid. After October 1, 2009 all Condo projects will have to go through new approval. Until a Condo project is approved and listed with HUD then FHA financing will not be an option. Over time, this should really streamline the time it takes to do FHA loans on condos here in the Utah County area.
The drawback is that it may take longer and be far more difficult to get an FHA loan done on that first unit in the project, so keep that in mind when buying a Condo that is not on HUD’s approved list. If you would like more information about these changes and what the requirements are for a Condo project to be eligible for FHA financing, just let me know!
The drawback is that it may take longer and be far more difficult to get an FHA loan done on that first unit in the project, so keep that in mind when buying a Condo that is not on HUD’s approved list. If you would like more information about these changes and what the requirements are for a Condo project to be eligible for FHA financing, just let me know!
