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Answers (17)
Best Answer
- Doug Hutchins, "90 day rate locks"
- Contributions:721
AA,
just the lack of spot approvals will hurt by eliminating buyers with less than 10% down from condos that aren't on FHA's approved list.
I have a low income buyer that qualified for specially priced housing under a NJ law (Mount Laurel). Ironically, the complex never went for FHA approval...they never had to because FHA allowed the spot approvals. Now she's forced to put down at least 10% and her credit is borderline so the PMI co's are probably going to reject. Without the spot approval this buyer can't purchase a home that is deed-restricted for low income buyers.
just the lack of spot approvals will hurt by eliminating buyers with less than 10% down from condos that aren't on FHA's approved list.
I have a low income buyer that qualified for specially priced housing under a NJ law (Mount Laurel). Ironically, the complex never went for FHA approval...they never had to because FHA allowed the spot approvals. Now she's forced to put down at least 10% and her credit is borderline so the PMI co's are probably going to reject. Without the spot approval this buyer can't purchase a home that is deed-restricted for low income buyers.
- Andrew Adams, "203K Specialist"
- Contributions:9349
Hamp,
You haven't heard about the new Cash for Condos program designed to artificially stimulate the sale of condos....It is similar to the cash for clunkers program. It will entice all these folks to go out and buy these brand new spanking cars only to realize that after they have been driving it for a months they actually have to make payments on them...Unlike the clunkers...Since most americans are already over extended those that bought new cars will eventully fall behind on thse payments have the new cars get reposessed...have no way to get too and from work any longer and end up on unemployment!
You have to love the Govt's helping hand! Want a piece of Candy boys and girls?
You haven't heard about the new Cash for Condos program designed to artificially stimulate the sale of condos....It is similar to the cash for clunkers program. It will entice all these folks to go out and buy these brand new spanking cars only to realize that after they have been driving it for a months they actually have to make payments on them...Unlike the clunkers...Since most americans are already over extended those that bought new cars will eventully fall behind on thse payments have the new cars get reposessed...have no way to get too and from work any longer and end up on unemployment!
You have to love the Govt's helping hand! Want a piece of Candy boys and girls?
- Hamp Yonce, "Zilluminati"
- Contributions:3463
James Ryan
I couldn't agree more. Thumbs up. Condos are overpriced apartments. I hope Obama outlaws the concept.;-)
I couldn't agree more. Thumbs up. Condos are overpriced apartments. I hope Obama outlaws the concept.;-)
- Andrew Adams, "203K Specialist"
- Contributions:9349
Just because it has not been an FHA approved Condo doesn't mean you can't get the condo approved. It will be a little more work but look at the flip side of getting the condos approved!
- James Ryan, "GreatRateFolks"
- Contributions:1038
The saying for years in our office is "Condo is a four letter word". To my mind, how much more of a hit can condos take? I guess I thought the bleeding with condos was over, but I was wrong. I think these new rules are going to cause another round of lower valuation on condos, and I wonder, how much more of the fun of my job can be squeezed out of it before I go deliver pizzas? I hope I look good in blue, red ane white? Jim
- Andrew Adams, "203K Specialist"
- Contributions:9349
Doug,
I get Conv and MI condo changes having a negative impact, that is my opinion that I shared on another thread. I don't see how the change to FHA condo approval will reduce the # of condo's that get approved FHA.
I get Conv and MI condo changes having a negative impact, that is my opinion that I shared on another thread. I don't see how the change to FHA condo approval will reduce the # of condo's that get approved FHA.
- Doug Hutchins, "90 day rate locks"
- Contributions:721
The PMI companies won't u/w with less than 10% down, and are becoming more picky across the board. Throw in the lack of FHA financing and yes, you have effectively eliminated the source of financing for a large number of first time buyers. Pricing will absolutely be affected by this. Not just for condos...present condo owners looking to sell may be unable to trade up, reducing the pool of buyers moving into single family homes as well.
- Andrew Adams, "203K Specialist"
- Contributions:9349
I don't see how this change limits the condo's that can be approved for FHA. It means that if you are not a DE lender it will be more work but not unavailable. It's not all that different from Conventional condo approvals.
- Mike Harrison, "mikeharrison"
- Contributions:28
It will affect condos in a huge way. In my area you buy a condo when you can't afford a home.If a condo does not get approved FHA the value of the condo suffers greatly.
Anytime you take financing options off the table you reduce your buying pool.
Anytime you take financing options off the table you reduce your buying pool.
- Andrew Adams, "203K Specialist"
- Contributions:9349
I don't see this change hurting the values of condos. The damage to condo values is being done by conventional financing and MI. Condo's that are currently not Warrentable...are ggoing to have a real tough time getting to a point that they are warrentable.
- Joe Harris, "Joe Harris"
- Contributions:48
Condo's are not well liked in the secondary market. Heck, they are not well liked in the primary market! The massive saturation of new condos into many market places have created a glut of supply. Many condo projects we financed and built with investors putting down a small amount, in hopes to flip or assign the contract down the road. Well as we all know, the market tanked, and these "investors" walked away from their deposits. In south florida, you have entire buildings that are unoccupied, and without power.
FHA knows that condo values will continue to evaporate, and they do not want to take on the risk - thank god! This was a smart play by the FHA. At the end of the day, the FHA is the Gov't, which is us (or should be us), and I know I do not want to bail out a bunch of condo projects that were FHA insured.
So YES, condo values will continue to deteriorate, even after detached homes start to rise. and YES, this will not help things.
FHA knows that condo values will continue to evaporate, and they do not want to take on the risk - thank god! This was a smart play by the FHA. At the end of the day, the FHA is the Gov't, which is us (or should be us), and I know I do not want to bail out a bunch of condo projects that were FHA insured.
So YES, condo values will continue to deteriorate, even after detached homes start to rise. and YES, this will not help things.
- greg knox, "Greg Knox"
- Contributions:80
It will be a problem (big) for those projects not currently approved, but I don't see how it will hurt values on approved projects.
- Matthew Ryan, "matthewryanre"
- Contributions:51
Also, It was a question not a statement.
- Matthew Ryan, "matthewryanre"
- Contributions:51
I'm asking about the new guidlines for Condominiums laid out in the - Mortgagee Letter 2009-19 - no more spot approvals...
Any condos not already approved will have to go through a long process to get approved. This will eliminate a large portion of buyer that would need to use FHA financing to purchase their condo.
If you have not read the Mortgagee Letter than you better get on it.
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-19ml.doc
Any condos not already approved will have to go through a long process to get approved. This will eliminate a large portion of buyer that would need to use FHA financing to purchase their condo.
If you have not read the Mortgagee Letter than you better get on it.
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-19ml.doc
- Wayne Brown, "SDMortgagefinder"
- Contributions:1433
- Justin Sheftell, "Courtesy Mortgage"
- Contributions:3423
I assume he is referring to prior FHA announcement that Spot Approvals will no longer be allowed for Case Numbers after Oct 1, 2009.
I think it would safe to say it obviously will not be helping values for complexes that are not on the approved list. When you consider that condos are frequently bought by first time buyers, and first time buyers frequently have less than 20% down payment....the conclusion is clear.
I think it would safe to say it obviously will not be helping values for complexes that are not on the approved list. When you consider that condos are frequently bought by first time buyers, and first time buyers frequently have less than 20% down payment....the conclusion is clear.
- Wayne Brown, "SDMortgagefinder"
- Contributions:1433
Matthew
Care to elaborate on your statement.
Best Regards
Care to elaborate on your statement.
Best Regards
How do you think that the new rules for the use of FHA loans on Condos will affect thier value?
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