The Federal Housing Administration (FHA) has announced that the Department of Housing and Urban Development (HUD) is going to make the process for Condo Associations to become FHA-eligible a little easier. Currently, Condominium projects have to go through a lengthy and sometimes expensive application process to FHA to be approved. This allows buyers who plan to purchase a home using an FHA loan to do so. Currently, these Condo associations must re-certify every two years or the approval expires, and buyers can no longer purchase in that project using an FHA loan. The FHA is going to extend this approval period to five years to assist Condominium Associations and give them some more breathing room. They hope (rightly so!) that with less of a hassle, more associations will apply to be FHA approved-- meaning more buyers interested in purchasing a condo will be able to do so using an FHA loan!
Why the big deal? FHA loans are currently one of the easiest mortgages to get. It has reasonable financing rates and a low downpayment requirement of 3.5%. To purchase a Condo, you must either pay all cash, use a Conventional Loan (requires usually 20% downpayment) or hope it is a VA or FHA approved condo. Many are not currently, which narrows down buyer options with this loan program. Condominiums can be a very affordable alternative to apartment-style living. You own the condo and everything within your four walls, and share ownership in common areas. Condo associations take care of the rest. They maintain the exterior (grass cutting and snow removal), any amenities like playgrounds or pools, hallways, reception areas, and the buildings sometimes have security. Keep in mind that the Condo Association runs off of a monthly or quarterly Association Fee. This can be anywhere between $50-300 per month depending on location.
To find out what Condos are on the market in your price range, just Search for Properties at the top of this page. Make sure Condo/Townhouse is selected.
Read the official National Association of Realtors report here.
Lothian MD Homes for Sale - Genna Fleming, REALTOR® with EXIT ELITE REALTY
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