FHA Certification Update and Guidelines for Condominium Associations

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In February of this 2010, an important change was made that could have repercussions for many condominium and town-home associations. Now entire associations must become FHA certified before purchasers can buy into their developments. Because almost one-third of buyers today use FHA loans, this change can have a drastic effect on the marketability of units in your association. Owners and board members need to be aware of this change and realize the effect it could have. If an association is not FHA certified, many buyers have to look elsewhere. We all know that todays real estate market needs as many buyers as possible.

The change came down from the Federal Department of Housing and Urban Development. It applies to FHA home loans. FHA (The Federal Housing Administration) was created in 1934 for the purpose of making home ownership easier to attain. Then, like today, the housing market was in terrible condition and needed help. Today, FHA loans account for more than 30% of all home closings and experts predict that percentage will increase.

FHA does not actually make the loans. Approved lenders do and FHA guarantees them. Because the loans are backed by the Federal Government the lenders risk is minimized. These lenders can thereby pass along this reduced exposure to their borrowers offering competitive loans featuring reduced rates, smaller down payments and easier credit approval. This makes the home buying process easier and opens up the market to many more potential home buyers. Many associations promote and advertise the fact that they are ” FHA Approved.”

In order to obtain FHA certification, associations need to meet certain requirements. There are some steps and work involved, but it should be worth the effort. It will allow your association the ability to tap into this large pool of FHA home buyers. The benefits can be immense.

In the past, FHA would consider each transaction and application individually. Each property would be inspected to see if it met FHA standards. That was called spot approval. The recent February 2010 change eliminates spot approvals. Now entire associations need blanket approval or “FHA Certification”.

Condominium and Town-home Associations may obtain FHA Certification if the following guidelines are met:

1.No one unit owner may own more than 10% of the units in the Association.
2.No more than 15% of the units can be more than 30 days past due on their assessments.
3.A full budget review will take place and it must be determined that 10% of the associations operating funds is allocated to reserves
4.Right of first refusal may be in the associations bylaws, but it cannot violate Fair Housing Act
5.Association must be at least 50% owner-occupied
6.No more than 25% of the floor space can be commercial space

Obtaining FHA Certification can be a tremendous catalyst for the marketability of your association. It will put your condo or town-home on the radar screen for many buyers. What was not obtainable may now be a possibility. Realtors will add your association to the list of places to show. The homes become affordable for so many more buyers. Sellers as a result will see an uptick in interest hopefully creating more demand for their units and a better overall selling market for the entire association.

Root Realty, as an experienced condominium management company, welcomes the opportunity to discuss the benefits of FHA Certification with your association. We can explain the process and review with you the steps involved in obtaining certification. Root Realty will be happy to assist in any way we can.

Reverse Mortgage-the Convenience Of Loan Repayment For Old Age

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We are familiar with the term mortgage which is a necessary financial factor for those who are having less finance with them while buying a home. On the other hand, reverse mortgage is a similar kind of financial benefit received by the homeowners who are in the retirement age. Here they will be able to obtain the finance against their home as mortgage and they will not be paying anymore amount until the sale or death of the borrower.

In California, the reverse mortgage needs are properly managed and taken care by one of the CA reverse mortgage lenders called Senior Reverse Mortgage Advisors (SRMA). Here they insist on the advantageous factor that the senior citizens who are eligible for availing this mortgage are benefitted of adding extra money to their retirement benefits which can be utilized for their various household necessities. They are even able to utilize this money for paying off the existing mortgage burden to redeem their interest burden or for meeting their healthcare expenses. As a reputed reverse mortgage lender in California, SRMA maintains good money lending records by considering the finance needs of the senior people. It is calculated that the interest to the loan will be accumulated to the monthly balance. Here the main advantage of the homeowner is that he is not at all paying any penny until the end of the proposed reverse mortgage period or till the death of that borrower.

The amount and value assessment of the reverse mortgage before availing the same depends on various aspects like age of the borrower, the type of mortgage, the value appraised on your home, the prevailing interest rates in the market. While availing such a loan, it is assured that you will be maintaining the title of your home until the tenure. Until the borrower passes away or leaving their primary residence, there are no question of repayment related to the reverse mortgage. Also other than the normal mortgage where the credit worthiness is an important factor for the lender, here there are no such criteria to qualify the same. SRMA provides you various options where you can also apply for the reverse mortgage. You will be also eligible to avail the reverse mortgage which can be used for paying off your existing mortgages. They are also not charging you any hidden costs such as origination fees, third party closing costs or FHA mortgage insurance premiums etc.

As one of the expert CA reverse mortgage lenders, they are one of the best advisors in the similar field having various clients. This reverse mortgage lender in California helps for the senior by not spending additional money for the loan repayment purposes and keeping the same for their other old age expenses like healthcare matters.

Interested In A Condominium Get A Fha-insured Loan

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Mortgage Insurance for Condominium Units (Section 234(c)) program assists potential homeowners in purchasing a home in a condominium development. The prospective condominium must be the potential homeowner’s primary residence.

The intent of this federal program managed under the U.S. Department of Housing and Urban Development (HUD) is to insure the loan of a borrower who buys a unit in a condominium property. HUD does not directly provide loans to borrowers. Instead, HUD insures loans through FHA-approved lenders. Some of those who take advantage of the program are low- to moderate-income renters who want to buy their unit in order to avoid displacement when their apartment building is converted into condominiums.

Some aspects of the program are as follows:

*Program insures the loan up to 30 years.
*Condominium development must be separated into a minimum of four dwelling units – can be a walk-up, a rowhouse, semi-detached or an elevator structure.
*Loan is made by a certified HUD lender.
*To be eligible, you must prove creditworthiness and meet FHA underwriting criteria.
*Down payment may be as low as 3 percent or less – FHA insurance enables homeowners to finance around 97 percent of the home’s cost through the home loan.
*Some closing fees may be included in the loan, reducing up-front cost.
*FHA limits certain fees charged by lenders – e.g., loan origination fees.
*FHA limits the amount of the home loan based on the locale of the condominium and number of units being bought.

Some restrictions do apply to the program. FHA will not insure loans under this program for rental units converted to ownership except as follows:

*Units were converted over a year prior to loan application.
*Potential borrower or co-borrower was a tenant of one of the converted units.
*Property conversion is sponsored by a tenant’s group that represents the bulk of households in the development – 80 percent of FHA-insured home loans must be for owner-occupants.

In order to get started, you need to find a FHA-approved lender. You may do so by contacting lenders and asking them if they are FHA-approved or by conducting a search on the HUD website. Either way, you’ll want to shop around for a reputable lender with a good interest rate and low closing fees.

Compare rates and fees, and use the following as a checklist to compare lenders:

*How much is the lender charging for the interest rate and origination fees?
*Is the lender approved by FHA for your local area?
*Do you know the lender’s reputation?

Ask plenty of questions and keep the following in mind:

*Interest rate is not regulated and points are not set by the FHA.
*Before signing any agreement, understand that you are responsible for negotiating with your lender regarding the terms set for the loan, to include routine and reasonable closing costs required to close on the loan.

Property developers who intend to finance the construction or renovation of properties they intend to sell as units under this program may also obtain FHA-insured mortgages.

For more information, visit the HUD website or contact your local lender.

Avail Milwaukee Mortgage Loan At Good Rates

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Apply for the Milwaukee mortgage loan and avail the various benefits offered by it.

When you are planning to buy a home then there are a lot of procedures involved in it and also the availability of finance is a very essential part when you are planning to buy a home. The problem of finance can be solved with the Milwaukee mortgage loan provider you just need to visit the website and you will be able to avail the best loans and deals which will help you to buy your dream house. All your requirements will be fulfilled with these loan providers.

There are many types of Milwaukee mortgage loan available in the market but it is up to you to choose the one which suits your requirements and also who gives you the best facility. The different types of mortgage loan which are available includes the low down payment loans, fixed rate mortgage, adjustable rate mortgage, interest only purchase loan programs etc. if you don’t have knowledge regarding the mortgage loans and its rates it would be better that you hire a expert or a broker who will assist you to in finding the best rates and mortgage loan according to your requirements. There are many financial institutions that will provide you with the mortgage loans. The rates of interest that are provided by the different financial institutions are different from the other.

They aim at providing exceptional customer service and first priorities are their clients. Their aim is to assist their clients through the whole process of loan providing; this makes their clients feel that they are in safe hands. We have years of experience in the filed of providing mortgage loan to the clients. The Milwaukee mortgage loan is the licensed originators and their staff people are qualified and they suit their designations as per their qualifications and also fulfill the Housing and Economic Recovery Act of 2008 and Federal SAFE ACT requirements.

The other loan programs that the Milwaukee mortgage loan offers you are the VA Loans,

Reverse Mortgage loans, FHA loans etc. They also provide the additional tools which are also known as the calculators they include the mortgage payment calculator (PITI), mortgage payment amortization, rent vs. buy calculator etc. You just have to visit the site and you will be able to avail the loans which you are looking at.

If you have any doubts or queries regarding the loans or regarding the rate of interests then you can email them. You can also visit their site for more details and information.

Its Important For Your Condominium Community To Be Hudfha Approved

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The Feds changed the game.

You now need to be HUD and FHA approved before your condominium community can offer FHA loans to your buyers. Once your complex is approved you must be recertified every 2 years.

If your condo community is not HUD/FHA approved you are missing out on a lot of buyers.

For people who can’t qualify for conventional loans the FHA loan program is the answer.

According to DQ News in April 2011 – 33.4% of the purchase mortgages used in 20 of the largest metro areas were FHA-Insured and the November 2010 Realtors Confidence Index reported that Nationally 39 percent of recent buyers purchased a home with FHA-insured loans.

If your condominium community is not FHA approved you are missing out on a lot of potential buyers. This will also affect current homeowners when they go to sell their unit.

For many first time home buyers qualifying for a conventional loan isnt possible. Through the FHA there are programs that make it feasible for these people to get affordable financing.

The Benefits of the FHA Loan Program

– A low down payment

The FHA program lets buyers put as little as 3.5% of the purchase price down. As you can imagine this opens many doors for people that wouldnt otherwise be able to come up with a conventional down payment.

– Help with closing costs

Qualified applicants can also receive up to 6% towards closing costs. This further reduces the loan and down payment amount.

– Co-Signer requirements

Another part of the program allows for a blood relative to co-sign. What makes this program different is that if the home-buyers dont have enough credit to qualify on their own a blood relative can co-sign without needing to reside in the home that is being purchased.

With the help of those benefits people with little credit, low and moderate incomes and first time home buyers have more opportunities to find affordable housing.

These types of people make up a large part of those buying homes. First time home buyers are usually those that are less qualified for conventional loans. Without being HUD approved your condo community will not be able to provide affordable financing from the FHA.

Recently HUD made drastic changes to their condo approval program. These changes jeopardize the availability of FHA loans for condominiums.

HUD Changes:

– Elimination of spot approvals
– Mandatory recertification for projects approved prior to October 2009
– Re-certification every 2 years

The elimination of spot approval can cause major concern and problems for your condominium community. Spot approvals gave every condo community a way to assist people requiring FHA programs. Loans were decided on an as needed basis.

If you were relying on spot approvals to obtain financing for those homebuyers that need FHA assistance that option is no longer available. You will not be able to get FHA help to purchase a home within your community.

Now full HUD approval is required for anyone wanting to use the FHA loan program.

If your condominiums need to be certified or recertified now is the time to do it. It is anticipated that there will be a boatload of applications to HUD for FHA approval over the next few months so get yours in now. First come – first served.

To see if your condominium complex is HUD/FHA approved go to https://entp.hud.gov/idapp/html/condlook.cfm

To view HUD Mortgagee Letter 2009-46 B regarding condos approval go here http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-46bml.pdf

For a Condominium Project Approval and Processing Guide go here http://portal.hud.gov/hudportal/documents/huddoc?id=11-22mlguide.pdf

Condominium Rules Being Changed

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Condominium buyers have to abide by fresh lending rules. This has compelled many developers to scrap new projects. They fear many buyers will not be able to buy condominiums.

The Federal Housing Administration has put a limit on the number of buyers who can avail of loans. There are also restrictions on apartments where there are many delinquent owners and tenants too.

The strict lending norms have been designed to safeguard FHAs financial health. It may be noted that around 18 per cent of loans are in foreclosure or delinquent. FHAs cushion reserve has dipped below the minimum level required by FHA. This move has come as a blow to condominium buyers as FHA is the main source of financing.

Rene Oehlerking, marketing director of Garbett Homes, says that the development has had serious implications for the company. Already the company has scrapped a 300-unit condominium project. The complex will be redesigned as standalone homes. Many of the builders homes went to people who had FHA loans.
The condominium project of Garbett had to be cancelled because of FHA regulation that at least 50 per cent of condominium buyers must have FHA loans. In 2011, the number comes down to 30 per cent. There is also another rule that requires 30 per cent of homes in buildings be sold before the agency insures loans. In 2011, the number will rise to 50 per cent. In Florida, where the real estate sector has been ravaged by the effects of the downturn, there has to be a special approval before the loans are made.

David Ledford, senior vice president of National Association of Home Builders observes that the developers are just not interested in the condominium projects. The risk is too much. They fear that they will not be able to sell them to buyers. Government officials are of the opinion that such rules are necessary to protect consumers from being duped. There must be a flexible yet balanced policy that will help to minimize risks to consumers.

Richard Vetstein says that the tough rules would ensure that consumers be protected. Now lenders would be more careful about projects they handle. This will definitely have a good effect as condominiums would then make for better investments. It may be noted that during the boom phase, the FHA was never a big source of condominium loans. The rules governing the condominiums were not even revised after the 90s.