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:
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Looks like a new mortgagee letter from FHA, mortgagee letter 2009-46b is out with the new condo approval process for FHA loans. Saying it simpler, if you are buying a condo these are the guidelines lenders will be looking at for all FHA loans. You still have guidelines from Fannie Mae and Freddie Mac, then beyond that it is up to each individual lender and their interpretation of the guidelines and how much risk they want to take on. I originally talked about these changes in my earlier post HUD Delays Condo Changes notifying everyone of the delay until December 7th, 2009 for these changes to take place. The major change is the elimination of FHA’s Spot Loan Approval process for condo projects. So this means that all projects will be required to be approved through FHA with two approval options:
*HUD Review and Approval Process (HRAP)
* Direct Endorsement Lender Review and Approval Process (DELRAP) — The preferred method for approval, as it is typically faster.
DELRAP is available only through lenders who have unconditional Direct Endorsement authority as well as staff who are experienced in reviewing and approving condo projects. So this means for any one looking for financing on condos it is very important now what lender you choose and knows what they are doing!
Here is a link to the actual Mortgagee Letter 2009-46b for your reading pleasure. Any questions please feel free to ask and as always……Hope this helps 
