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It would not be better --- spot approvals and easy guidelines resulted in massive foreclosures of condos during the recession (condos foreclosed at a far greater rate than single family homes, largely due to the fact that they become investor-saturated)
I don't agree with all of HuDs rules and guidance re: approval, but many of the guidelines play a significant role, especially considering HuD insures FHA loans, which are a direct pipeline to taxpayer funds.
Ryan Huggins - Thousan...
Thousand Oaks, CA
Sandy Padula and Norm...
Nina Hollander, Broker
I think many buyers are fortunate that we have an FHA program, period....
Tony and Suzanne Marri...
Yes and no, the problem is when you have a condo complex, poorly run or in debt or mostly tenant occupied, it can pose issues for home owners in the future. I am all for making it easier for these condos to apply and get approved.
Fred Griffin Tallahass...
This has been the case for decades, just enforced much until the most recent market crash. I don't have a problem with this requirement as a protection and John Meussner explained why better than I ever could have.
It's good to see the insights from the lender community. Thanks, John Meussner.
Nina Hollander, Broker
I would prefer that the govt just got out of the real estate business.
FHA or VA would be nice in the complexes that are in that price range. I have NO idea why they make it so difficult to get the approval for the complexes though. It's so difficult that many don't want the hastle of going through the application process.
Or VA approved...
It cost me a sale this year.
Could have sold many to one of my buyers, if it were not for the FHA List.
FHA did just loosen up some guidelines though on owner occupancy.
It seems you are talking about condo projects. FHA is tough on standards for a reason and it to insure it is well established and not propped up by developers that will pull out on a whim.
Nina Hollander, Broker
Single family homes are unless they are trashed. I think that condo/townhouse complexes should get on the ball but they don't.
They are supposed to be easing up on restrictions soon. Maybe a LO can chime in.
Why? In our market FHA accounts for just 15% of all sales per month. VA even less. We are a high cost area with a very tight listing market and big time buyer demand.
Sounds good to me.
All the homes I sell can easily quailify for FHA or VA loans. The only concern is that offers with FHA and VA loans can seldom compete with conventional loan offers.
Tony Lewis FHA loans have loan limits so they wouldn't work for all properties. John Meussner summed it up nicely for those that do.
A good lender will take care of getting a condo complex FHA approved. They even cover the costs.
Blanket approvals are risky.
NAR was succesful in getting FHA to lower the requirements from 50% owner occupancy 35%. 280,000 REALTORS® sent texts to Senators to vote on HR 3700 which also improved rural housing loans.
Better for whom?
Be aware that maintaining status on 'that' list comes with a cost to the community.
Another cost is transferred to owners as FHA imposes/transfers expenses to the SELLER AND the customary 'closing cost' contribution. And don't get me started on the FHA appraisal.
Would it be better? Only if you believe when you hear, "I'm from the government and I'm here to help."
I'm kinda with John Meussner on this - we saw way too many condo foreclosures doing this past depression and economic fiasco
Barbara Todaro nailed this one!
Not sure developers want to undergo the process in many instances!
It would be nice
As John Meussner stated.
Better for who?
I think there is benefit to FHA only being allowed in financially sound complexes. While I do think there are way too many rules regarding financing, this one seems to protect the buyer.
that would simplify the loan process
Yes I agree.
Tony Lewis - like any 'organization', they have their own guidelines!
At times, I have seen single investor owner with more than 60% of the homes!
FHA just wants to avoid some risks.
Never have handled or accepted a non-conventional loan in 12 years. I avoid them whenever I have high down conventional mortgage buyers.
Condos? All of the common areas and shared real estate has to be approved, which means that the whole complex has to be approved.
Well, it would be easier to get increasingly popular reverse mortgages through in condos. It's interesting because it's so easy to get condos approved these days.
I'm working with FHA approval company right now. HOA management company is in its worst behavior.
I suppose but sounds boring
No. Why should the FHA approve anything in our great country?
Not sure I agree since these loans are insured loans by US government. Yes, an FHA loan is a challenge but I work closely with FHA lenders to assess both the property and the buyers' potential.
Thanks for posing the question, Tony Lewis