HUD is easing the requirements for condo approvals for a limited time. This is a great opportunity for home owner associations to submit their condo for HUD approval so that units in the condominium may be eligible for FHA financing.
Recently Travis Pittman of King 5 news shared his personal story about how he is unable to sell his condo in Kent. He sites part of the reason that he is unable to sell the condo is because of FHA requirements. I do agree, it’s important to keep your condo on FHA’s approved list, however the data that was provided in the article is not entirely correct.
A few weeks ago, I helped a Kent couple purchase a condominium located in Seattle for their daughter to live in while she attends college at Seattle University. They were prequalifed with their credit union, however the credit union was treating the transaction as if it were an investment property even though the couple (we’ll call them Mr. and Mrs. Kent) were not going to rent the property.
Condos come in many forms including high-rises, converted apartment buildings and even some town-homes may be condominiums depending on how they are legally described. If you’re planning on buying a condo and not paying cash for your purchase, here are a few things to look out for where lenders may have an issue with.
Fannie Mae’s latest hits to rate will be implemented by lenders any day. Condominiums are really getting spanked with a 0.75% add to fee if there is less than 25% home equity in the property. This will apply to both purchases and refinances for any mortgage except those amortized 15 years or less.
If you are considering refinancing your condo, contact your local mortgage professional right away (I can help you if you’re located in Washington state)…if you’re in the process of buying a condo and are “floating” your interest rate, I highly recommend considering locking.
PS: Cash-out refinances are also getting whammo’d by Fannie. Don’t wait!
Editors Note: I would like to welcome our “first” Sunday Driver, Jason Mook, who is going to tour us around Sierra Crest in Puyallup. Jason is a Realtor with Windermere Real Estate/South and is the author of Puyallup blog A Generous People.
Editors Update: Loan limits are different than what’s reflected below from when this article was originally written. Check with your local FHA approved Mortgage Originator to see what your loan limits are (or click on the link in the second paragraph).
On Thanksgiving I think back to a dinner I was making for my entire family in my small condo I had just bought in Des Moines. I was a fairly new single Mom and my son, who was in Kindergarten, was watching me prepare the feast. One of the dishes was sauteed pearl onions which called for frozen onions; Birds Eye brand to be exact. Well after my son watched in horror as I made the turkey dance around the kitchen trying to be funny, he was pretty much transfixed to what I was doing in the kitchen.
Dinner was very cozy in my my small dining-living room. Everything really turned out nice when suddenly my son let out a huge yelp, “nobody eat the onions, they’re bird’s eyes!”
Every time this year I remember that dinner and just get a huge chuckle.
Happy Thanksgiving to you and your family!
Mortgage Master is closing at 2 p.m. today and we will reopening for business as usual on Monday, November 26, 2007. I will not be posting mortgage rates on this Friday.