Is Your Condo/Townhouse Approved by HUD for a FHA Mortgage to Buy or Sell?
There is an important issue regarding your community that can have an effect on the ability to sell your home for the highest and best price. This issue stems from a decision by the Department of Housing and Urban Development also known as HUD. Many pre-approved buyers are very interested in this information if they are looking for a property to buy!
HUD now requires that all condominiums have a valid HUD approval in order for a buyer to obtain a FHA Mortgage. A FHA mortgage is now the most popular loan program in the country accounting for over 50% of all loans issued in certain markets.
The reason why you want your condominium to be FHA approved is that in the event that you ever choose to sell; your property will appeal to the largest percentage of the buying community.
Without a HUD approval, FHA buyers may have no choice but to look elsewhere in the communities that carry the approval. Housing values within a community can drop if your complex appeals to only a small percentage of buyers who can qualify for mortgages.
There are many factors that can affect the approval process. Projects must be covered by hazard and liability insurance and the home owners association must maintain a budget reserve of collected funds to cover necessary repairs and other emergency expenses. Bo more that 10% of the community can be owned by one investor and at least 50% of the units must be owner occupied. No more than 15% of the total units can be more than 30 days past due on their homeowners association dues. Any open litigation must be settled. There are other requirements that must be full filled to become HUD approved.
In Hillsborough, NJ as of today there are only two communities approved by HUD. Many approvals in Hillsborough, NJ expired at the end of July 2011. Several other developments have applied for their approval, which can sometimes take at least four to eight weeks. There is a HUD website that is updated with the currently approved developments. An approval lasts for 2 years unless there is a change in any of the required criteria (acceptable thresholds.) There are companies that can help the Home Owners Association obtain the HUD approval at a reasonable rate. Please contact me if you would like this information.
Buyers may have other options to by a unit in a condo complex that is not HUD approved. There are USDA loans available in several areas that allow a buyer a low down payment and lower interest rates. Many properties in Hillsborough, NJ can be purchased with a USDA loan. There are other loan options like the Smart Start program.
To see if you qualify for any low down payment programs like the First Time Home Buyers Program, Smart Start Program or the USDA Loan Program contact me anytime.
For an updated list of open houses this coming Saturday and Sunday in Hillsborough, NJ, email me directly at CarolKronmaier@Weichert.com.
If you are considering a move into or out of Hillsborough, it pays to plan ahead. Start here to search homes for rent or sale in Hillsborough, NJ. I focus on Hillsborough but am well prepared to discuss other areas as well: Montgomery, Manville, Bridgewater, Raritan, Branchburg, and Somerset- most of Somerset and Hunterdon counties!
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