12 Aug 16
Want to get a loan on a Condo with 3.5% down? FHA May Become an option again for Condo buyers
The Federal Housing Authority (FHA) just relaxed condo project approval requirements, effective immediately. This is great news for both buyers and sellers! For buyers, it opens up a larger pool of potential homes. For sellers, they now have access to a larger number of qualified buyers. Plus, the condo complex housing their vacation home may now qualify!
Condo buildings must be certified as eligible for FHA financing. Many condo complexes didn’t renew their certification as it was too much work to renew. This dropped them out of FHA loan eligibility, which meant the condo building was off limits to FHA buyers. The FHA has streamlined the process to recertify, meaning more buildings could be eligible soon.
What this means for Sellers:
More buyers: Easier requirements to both renew and prove adequate insurance coverage means your previously not-FHA-approved building can soon be approved. This opens up your condo to many more qualified buyers.
Your second home may qualify: Owners who use the condo as a second residence are now also counted towards owner occupancy, which means the condo complex your second home is in may now qualify.
What this means for Buyers:
Larger pool of potential homes: Buyers will have more choice within all price ranges and all areas. This is especially great news for folks looking in denser areas closer to work or amenities that they love. Work on the westside? Great news for you, as the westside is especially condo-dense and a great choice for those that work in that area.
Ability to buy sooner: FHA loans offer options to those that previously hadn’t considered themselves ready to purchase. FHA Loans offer down payments of just 3.5% for buyers with credit scores of 580 or higher. Have a lower credit score? Credit Scores between 500 and 579 are still eligible, with a larger downpayment of at least 10%