Thursday, December 10, 2009

FHA loans for Condos In Fremont

Most home buyers for condos in Fremont are unaware of the new changes in FHA requirements. When I say requirements, I am not referring to the buyer's requirements. They seem to have remained the same, but the real change has come from somewhere else. FHA loans for condos in Fremont and everywhere else have placed HOA risk assessments into the picture.

FHA is a program not necessarily a loan by itself, and lenders need to comply with the program that is set forth by HUD (Housing and Urban Development). The new catch is that the subdivision/HOA has to have been approved by HUD for FHA loans in Fremont to occur. Here's an example. If a condo subdivision, say like Mowry Gardens in Fremont (Redwood Terrace), has condo for sale which it does by yours truly here and, if, for some reason, there was a lawsuit pending against the HOA, or the HOA has low reserves, or if the HOA has insufficient insurance--you get the idea, HUD will not FHA approve them anymore. It actually is a long 6 month process for the HOA to get approved by HUD.

There are countless individuals who are at risk of getting their condos in Fremont pulled out from under them right in the middle of their transaction. I have two in jeopardy. At the time of our office receiving the short sale offers for our sellers, HUD was allowing FHA loans for condos in Fremont to take place. Now, for the reasons mentioned above, the risk is too high for the program to carry on for all condo subdivisions who have not been HUD approved already. Now that we are weeks away from getting a short sale approval (that is a very short time in the world of short sales), we could lose out again. You and I are not alone here. This is happening across the board for all condos.

All is not lost. PUDs (Planned unit Developments) and SFHs Single Family Homes are okay for "spot approvals" for FHA loans. That's where the lender can do an FHA approval for the buyer just like a regular conventional loan. No more.

If you happen to be looking for a home and considered FHA loans for condos in Fremont and only have 4 or 8% down for the condo purchase, then you are a likely candidate for attaining an FHA loan. They are good loans, But before you make an offer on a condo, you better ask your agent if the subdivision has been approved for FHA loans. If it has not been HUD approved, you cannot use an FHA loan. you have to go conventional with at least 15% down. B of A has a decent 15% down conventional at the moment as well as Wells Fargo.
By Jeff Pereyda

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