FHA Condo Approval List
May 17, 2012
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FHA Condo Approval List will make sure that you won’t miss any necessary document for your approval. Condos have become a popular home alternative for individuals who can’t or don’t want to purchase a house and lot. The Federal Housing Administration allows people to make loans to help them pay for their condo units. This article answers the frequently asked questions about FHA condo approval list.
What is FHA condo approval list?
As the name suggests, FHA condo approval list is a listing of all of the complexes that have been approved by the FHA.
Do you need to join FHA condo approval list?
In order to understand whether you need your condo to be approved, you need to first look into what the FHA loan is. This is a type of loan that is insured against default by the FHA, that is, the FHA guarantees your creditor or lender that he or she won’t have to write off a loan should you default, as the FHA will pay for the remainder. This makes this a good source of money for individuals who are looking to purchase their condo but don’t have the means to pay for the sum.
FHA loans, however, are only approved if the person will be purchasing a unit from a unit that is included in FHA condo approval list. In the past, spot approvals were allowed by the FHA. However, the rules have changed, which is why the entire project or complex must be on the approval list in order for your loan to be approved. As such, while condos are not required to get approved by the FHA, complex and unit owners usually take the initiative to take the necessary steps needed to get approval to make the property more attractive to buyers.
FHA condo approval requirements
The FHA condo approval guidelines for condo complexes include:
• Number of units. The condo project must contain at least two units.
• Insurance coverage. The project should be covered by insurance, particularly for hazard and liability.
• Space. No more than 25% of the floor area of the project should be used for commercial purposes.
• Investors. No more than 10% of the units should be owned by a single investor (an individual or a company).
• Delinquent homeowners’ association dues. No more than 15% of all of the units should be in arrears of their association fees.
• Mortgage. At least 50% of the units must be sold prior to endorsing mortgages on any of the units that are part of the project.
• Owner occupancy. There should be at least 50% of the properties that are occupied by owners.
How will you find out if you receive FHA condo approval?
The FHA have jurisdiction in deciding whether your complex will become part of FHA condo approval list or not. The FHA condo approval process takes around 30 business days, so expect to find out the results during that duration. Check their website to see if you were able to make it to FHA condo approval list. If you don’treceive word from them after the 30 days have elapsed, call FHA to follow up on the status of your complex.
You can save yourself the trouble of having to coordinate with the FHA and the owner of the unit or the condo complex to get the necessary approval, if you’re interested in buying a condo unit, make sure that you check whether it’s part of FHA condo approval list.
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