Ticker

6/recent/ticker-posts

How has the FHA Changes in 2009 Affected Condo Complexes in Mission, Kansas?

In 2009, the Federal Housing Administration, or FHA, changed the loan approval guidelines for condominiums. The change made many of the condo complexes that once were FHA approved no longer qualify for eligibility — making it harder for Mission, Kansas condo sellers to sell their condos because there are fewer buyers for their condos.
Part of the FHA changes for condos is that the condo is required to re-certify every two years. The series of revisions made in late 2009 were put in place to reduce the risk of losses from foreclosures or delinquencies.
The changes have prevented thousands of condo developments across Mission, KS. from reapplying for, or obtaining, certification.
Condo sellers and buyers all over Mission, KS. are extremely frustrated. 
It is ironic that the FHA condo program was first developed to stimulate the housing market during the Great Depression by insuring mortgages against borrower default. FHA-backed loans also allow buyers to make a downpayment as low as 3.5% on condos, unlike traditional conventional mortgage loans that may require a condo buyer to make a 20% down payment.
During the recent recession, FHA has moved to restrict risky mortgage loans due to higher defaults.
FHA Condo Restrictions
Some Mission condo complexes have not sought to renew their eligibility due to lack of reserves required by FHA.
Others Mission condos haven’t sought to reapply due to pending litigation, or because more than 15% of the condo owners are behind on their HOA dues. These are additional restrictions imposed by the FHA.
HUD, U.S. Department of Housing and Urban Development, the department that oversees FHA requires Mission condos to have no more than 15% of the condo owners no more that 30 days past due with their condo association fees.
Other FHA changes require that not more than 10% of the Mission condo units in a single complex may be owned by one investor.
Since the mid 1990's, FHA has allowed spot approvals on FHA mortgage loans allowing strong condo buyers to get their mortgage loans to get approved. The 2009 FHA changes has eliminated spot approvals.
Spot approvals allowed individual condominium condo buyers to obtain FHA-insured loans even though the entire development had not yet been approved. This worked great for new condo projects that are just getting started. The new FHA guidelines no longer allows spot approvals.
Another change in the 2009 FHA revisions is that no more than 30% of the condos in a single Mission condo project can have FHA-insured mortgages. FHA made this change to limit their exposure to possible defaults on risky projects.
Since FHA was created to help home buyers, do the recent changes limit the number of Mission condo buyers?
If two comparable Mission condo complexes are across the the street from each other the FHA condo approved project will out sell and sell for more money than the condo project that is not FHA eligible.
Although many people think FHA loans are only for first-.time buyers, FHA mortgage loans are in fact for any borrower who wants meets the FHA borrower guidelines and want to put a minimum down payment. 
Currently there is only 1 condo project approved in Mission, KS. Summit Condominium with a FHA concentration rate of 6.81% is approved in Mission. Lido Villa's FHA approval expired in May of 2011. 


Homebuyers can find a list of  Kansas City approved FHA approved condos by going to https://entp.hud.gov/idapp/html/condlook.cfm and entering the zip code of the area they’re shopping in.




RE/MAX sells more homes than any other real estate company.
For a reason...should we talk?

Blog post written by the Dowell Taggart Team of RE/MAX Premier Realty 

Comments are appreciated! Go ahead and add your 2 cents . . .
We have 3 easy steps to find you the perfect home . Click here to get started, today!

kansas city real estate network - dowell taggart team
Short sales, foreclosures, luxury homes, investor homes, first time home buyer homes, land, investment properties and move up buyers.

Gardner, Olathe, Overland Park, Leawood, Lenexa, Shawnee, Mission, Merriam, Prairie Village, Basehor, Tonganoxie, Lansing, Leavenworth, Spring Hill, Eudora, De Soto, Edgerton, Platte City, Smithville, Gladstone, Liberty, Riverside, Independence, Lee's Summit, Pleasant Hill, Raymore, Belton, Grandview, Raytown, Waldo and the surrounding Kansas City communities.


start kansas city home real estate search, find kansas city real estate house why use kansas city real estate network kansas city home evaluation, house appraisal, kansas city home value

Post a Comment

0 Comments