FHA Approved Condo Requirements

Biphoo

20 Sep 2017

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FHA Approved Condo Requirements

If you are a home buyer and you think that financing your condominium via an FHA loan is a good option then you must know that FHA has approved the condominium development and you are heading in right path. We all know that the FHA is a U.S. government-backed up agency and offers you an online lookup tool for making sure if the condo development has been approved. If you have confirmed the fact that if the condominium development in which you are interested is Pre-Approval for a Mortgage Home Loan then you should definitely research well to get full knowledge about the FHA mortgages for condominium purchases. There are certain reasons for why the approval for condominium developments holds importance for getting the FHA mortgage and also for the homeowners who own condos.

FHA Approved Condo Developments: What Are the Benefits?

If you want to buy a unit which is FHA approved then it automatically or by default means that you are now eligible to finance your purchase with the FHA Insured Mortgage Plan. There is one more added advantage that you are going to get which is that if you or any other person in your condo wishes to sell your homes then your buyers can have the aid to finance their mortgage with FHA itself. This will also help to increase the number of home buyers that approach, many of them can be first-time buyers also. So they can effectively use the advantage of Best Mortgage Professionals in Dallas (Tx) to purchase a condominium.

FHA has been asking you to make sure that the development which is approved is in good standing condition and completely complies with the state jurisdiction where it is located. This is done while the process of loan approval is going on. This will ensure the buyer the protection from the litigation related to a development’s failure to comply with the imposed state laws.

According to HUD’s Condominium Approval Guide, Basic eligibility requirements for condominium developments include:

This condition is a must that the development must have two units or more.There are chances that the condo development may take the charge or right of the first refusal on the sales of the units, so this right should not violate any federal laws. So this aspect needs to be taken care of.

This is the most important eligibility criteria that not more than 25% of the land that has been approved can be used for nonresidential purposes. And if in cases that required a nonresidential use, then it should be made sure that the purpose of that usage is consistent or goes hand in hand with the residential use so that the Home Loan Provider Company are not disturbed at all. There are exceptions which have been granted by the FHA in some cases but that will entirely depend on the case. And FHA has all the rights reserved to make a refusal to any case which it receives as a request. For a long time now this rule has been protecting the homeowners from the business-minded or nonresidential tenants who use their units in an incompatible or disturbing manner.

Limits on units owned by one owner or investor: Lowest FHA Loan Credit Score has been regulating some limitations on the ownership of multiple units by the owners who are the investors also. It is a rule that in a development of 10 units only one of them would be owned by the investor and in the case of more than 10 units then only 10% of all the units are owned by them and not more than that. The development includes various units which are owned by the builder of that development but then also the FHA has been allowing only the 49% of units to be owned by them in cases where the FHA has approved a condominium development. The rules and the regulations which are being imposed on the investors are implied on the individuals and also to the entities like the investment companies. Thus there is now a limitation imposed on the units of these developments for any nonresidential purpose. FHA approved condo developments subject to legally required rent regulations are not subject to investor owner limitations.

No more than 15 percent of units may be 60 days or more delinquent on HOA dues: This is that rule imposed by the FHA which has been protecting the homeowners against the shortage of funds for the repairs and maintenance of exterior and the areas which are common for the development.

There is this important rule which is mandatory that FHA should be informed about the special assessments and any litigation which is in the process when the development approval is requested. FHA Mortgage Loan Payment will review any special circumstances and ensure that the interests of the homeowners stay protected.

Hazard insurance: the FHA requires you to do placement of adequate hazard insurance coverage and this is done to protect homeowners against the structural damage which can be caused by fire or for any other casualty loss.

FHA Loans for Condominium Homes

This is so obvious that the nature of home ownership in a condo is inclusive of special considerations by laws, care, and use of the areas which are common and other circumstances that are not implied on a single family home which is not considered a part of the condo. Thus FHA has approved condo developments which offer home buyers and homeowners an assurance for the protection which is being provided by the HUD/FHA housing and lending requirements.

These FHA Homes Loans explained above are also available for purchasing or refinancing homes in FHA approved condominium developments. Instead of this loan, you can always opt for the conventional loans to buy or refinance a home in an FHA approved condo development. The FHA loans do not ever exceed the time period of 30 years and these are accessible for those units of the condo which are detached, semi-detached row houses, or the ones located in mid or high-rise developments. You can always contact the FHA lenders for any query and gather more information about these loans.