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Since Feb. 1st Condo’s and FHA have changed as people are starting to find out. More changes are happening for FHA with the costs for an FHA mortgage are going up after April 5th to find out about those details just check out FHA higher costs. With the previous post about the FHA condo changes  I touched on this breifly but wanted to summerize it for you. 

The good things with this change are that once you gather up all the information like you would have had to for a “spot approval” in the past, submit the info through a Direct Endorsed Lender, then they can work on getting the condo approved. Once the condo is approved for that one buyer going into the project……..THE WHOLE PROJECT IS APPROVED and everyone within the project should be thanking that one buyer and everyone involved who went through the process.

 Couple of key things you need to watch out for that would be red flags up front:

 1. 50% of the condo units need to be owner occupied.

2. Condo association must be maintaining 10% for reserves each year in their budget (this is a big deal killer) If not then need a reserve analysis showing why they are still ok below a 10% amount.

3. FHA financing concentration is not more then 30% (it is temporarily 50% because this is new)

4. No more then 10% of the units can not be owned one investor.

5. No litigation, if so need to know who, what, when, where, and why.

 These are just some of the major items that commonly cause issues. Hope this helps and want to see the actual letter from FHA then head to this link: Mortgagee Letter 2009-46A  and 2009-46B

Hope this helps