Dallas Condos Easier to Finance with FHA

Dallas Condos Easier to Finance with FHA

Buying and selling condos is a different world than single family homes.  As more clients are asking for condos in the Dallas area I found this information to be very helpful!

Thousands of condo unit owners and buyers around the country could soon be in line for some welcome news on mortgage financing: Though officials are mum on specifics, the Federal Housing Administration is readying changes to its controversial condominium rules that have rendered large numbers of units ineligible for low down-payment insured mortgages.

The revisions could remove at least some of the obstacles that have dissuaded condominium homeowner association boards from seeking FHA approvals or recertifications of their buildings for FHA loans during the past 18 months. Under the agency’s regulations, individual condo units in a building cannot be sold to buyers using FHA-insured mortgages unless the property as a whole has been approved for financing.

According to condominium experts, realty agents, lenders and builders, FHA’s rules have become overly strict and have cut off unit buyers from their best source of low-cost mortgage money, thereby frustrating the real estate recovery that the Obama administration says it advocates.

Barely 25 percent of all condo projects that are potentially eligible for FHA financing are now approved. That is despite the fact that FHA financing is the No. 1 mortgage choice for half of all condo buyers and is crucial to first-time and minority purchasers.

FHA officials defend their requirements as prudent and necessary to avoid insurance fund losses, but have expressed a willingness to reconsider some of the issues that have upset condo owners and the real estate industry. Among the biggest areas of criticism of FHA’s rules are its limitations on:

•  Nonowner occupancy. The agency requires that no more than 50 percent of the units in a project or building be nonowner-occupied. This rule alone has made large numbers of condominiums in hard-hit markets ineligible for FHA financing, where investors have purchased units for cash to turn into rentals.

•  Delinquent condo association fee payments. FHA refuses to approve a project where more than 15 percent of the units are 30 days or more behind on payments of condo fees to the association. Given the state of the economy, this has been a problem for thousands of associations, even in relatively prosperous markets. Steve Stamets, a loan officer with Apex Home Loans in Rockville, Md., says some unit sellers and buyers have been so frustrated by the rule that they have offered to pay the amount of delinquent fees needed to bring the overall project into compliance “just to get the deal done. This is a ridiculous situation,” said Stamets, who added: “When somebody calls up now and says they want to buy a condo with an FHA loan I cringe.”

•  Nonresidential space usage. FHA has set a cap of 25 percent of the total floor space in a project for commercial use. Critics say this is too low and unrealistic for condo projects in urban areas, where retail and office revenues can be important to overall financial feasibility.

The agency has imposed a long list of other requirements on insurance and reserves, plus a highly controversial rule that associations interpret as creating severe legal liabilities for condo board officers if applications for FHA approvals contain inaccuracies. Andrew Fortin, vice president for government and public affairs at Dallas-based Associa, one of the country’s largest homeowner association management firms, says that many boards, facing the prospect of up to 30 years in prison and heavy financial penalties, have refused to apply solely because of this personal liability requirement.

FHA is expected to clarify the personal liability language and make other modifications in its forthcoming rules. Whether the changes will be enough to convince condo boards to apply for approvals in large numbers is uncertain, but industry experts say they – and condo unit owners – are likely to welcome whatever loosening of the current restrictions FHA can offer.

Article from NAR

Visit my website for more information and lisitngs on Dallas area Condos: www.yourhomeretriever.com

Lisa Montes-Your Home Retriever

REALTOR since 2008 specializing in Far North Dallas, Coppell, Carrollton, Grapevine/Southlake




Michael Worley Headshot
Phone: 214-394-8299
Dated: June 21st 2012
Views: 3,779
About Michael: Are you looking for a Realtor that will put your interests first? As a young kid growing up in the ...

Property Search

Chat with us now!

A real live chat operator is online now! We can immediately get your questions answered or make sure we get it to an agent who can.

RSS Feed

View our latest blog posts in your RSS reader. Click here to access. RSS

Search Blog

Our Bloggers

Kim Allman - 5
Cara Balderas - 16
Tami Bennett - 45
Jessica Boozer - 18
Rhonda Borgne - 1
Olivia Borowski - 1
Jennifer Boyd - 2
Deborah Boyd - 16
Jamie Brannagan - 1
Annette Bruen - 20
Moira Brunken - 11
Beverly Bryant - 16
Sherry Cabrera - 359
Ana Cantu - 1
Lisa Cardillo - 52
Bob Cardillo - 4
Shea Cargile - 12
Tori Cecil - 3
Lucina Cervantes - 11
Troy Copeland - 11
Gregory Cornett - 2
Angela Cotten - 44
Missie Craig - 12
Greg Cunningham - 2
Leah Ecob - 15
Kristine Edens - 3
Jill Elliott - 99
Laneal Ernest - 9
Nicole Espinosa - 27
Christopher Evans - 1
Heather Feragotti - 8
Mark Fischer - 2
Susan Florsch - 12
Jennifer Flynn - 3
Leslie Fogle - 101
Michelle Foreman - 110
Larry Frassinelli - 6
Chad Gabriel - 58
Malci Gariani - 1
Shalee Garza - 10
Cassie Gillock - 2
Ryan Gonzales - 3
Wilma Goodwin - 2
William Graves - 5
Sandra Hunt - 50
Bill Hurd - 3
Gary Hutchings - 20
Trenton Johnson - 15
Felicia Johnson - 77
Jemi Khan - 26
Leigh Klotz - 4
Amber L Johnson - 5
Michele Lafortune - 22
Wanda Lewis - 2
Mark Linder - 1
Noreen Lodhi - 9
Stacy Lynn Massar - 27
Hiwot Melaku - 1
Jennifer Menting - 17
Mikki Migis - 8
Richard Mikus - 1
Sean Moniri - 21
Naddia Morales - 10
Keith Moses - 9
Mark Mulch - 19
Erick Murphy - 6
Steve Murray - 1
Julie Nicholson - 10
Nikki Okpuzor - 3
Lori Oliver - 47
Alan Oliver - 7
Kelly Oltmann - 2
Kaysone Orlando - 1
Holli Paddio - 3
Ancy Philips - 7
JP Piccinini - 48
Julie Ann Pickering - 85
Ann-Marie Pope - 2
Mimi Rader - 1
Shelia Randolph - 33
Terri Anne Ray - 1
Teneka Ray - 1
Go 2 Girls Realty - 173
Bethany Rowan - 15
Kelly Rumney - 9
Amy Jo Saenz - 3
Linda Scardis - 4
Sandy Setliff - 208
Christine Shannon - 29
Rene Sinclair - 27
Shelby Smith - 3
Bryce Smith - 1
Monica Solkhon - 1
Rodrigo Sotomayor - 16
Brent Stack - 1
Jenna Stanley - 9
Kelley Stubbs - 3
Melodie Sulgrove - 1
Seana Taylor - 205
Mary Taylor - 13
Julian Taylor - 17
Erica Taylor - 40
Angela Taylor - 1
Karla Terrell - 2
Joey Thomas - 2
Jason Todd - 24
Andrea Trimble - 55
Miguel Umana - 6
Staci Van Allen - 12
Diane Velez - 17
Debbie Viverito - 132
Nick Walton - 75
Spring Weeks - 8
Jessica Wilson - 5
Michael Worley - 160
Keisha York - 30
Debbie Zurita - 17

Saved Properties

This is a list of your favorite properties. We will email you if a property is reduced or leaves the market.

Click 'Save' to add a property to this list.

Register / Login

New & returning visitors please enter your information to login.

By clicking 'register' you are agreeing to our terms of use & giving us expressed written consent to contact you.

Questions? Comments? Complaints?

This message will go directly to the head of our team.

Location & Address

JP And Associates REALTORS
6175 Main Street #355 Frisco Texas 75034
Frisco, TX

Other Locations