Expand Your Education with These Courses from
A Consumer Advocate Approach to Real Estate & Mortgages: Courses 1 & 2.
BPOs: The Agent's Role in the Valuation Process.
Bundle 1: CIPS Core Course (US Version).
Bundle 1: CIPS Core Courses (Non-US Version).
Bundle 2: CIPS Elective Courses (US Version).

FHA Project Approval a Crucial Step in Selling Condominiums

Have a comment on this article? Share on Facebook!

RISMEDIA, December 7, 2010—Earlier this year, the FHA required all condominium developments to have their developments approved as a prerequisite to lending. Without “Project Approval,” the FHA would no longer insure loans, effectively stopping FHA lending within effected developments.

The FHA loan has become the choice of many, if not most buyers, due to its highly affordable 3.5% down payment. Without Project Approval, the FHA loan and other FHA backed loan products will no longer be available in non-approved condominium developments including loans for refinance, debt consolidation and reverse mortgages.

Under guidance issued by FHA, developments granted project approval prior to January 1, 2008 had until December 7, 2010 to recertify or lose their approved status. Research reveals that to-date, most condos have not recertified.

According to Orest Tomaselli, CEO of National Condo Advisors, LLC, a consulting firm specializing in condominium project approval, the elimination of FHA lending in condominium developments will make selling condominiums more difficult, especially in today’s already challenging real estate markets. “We are seeing a ‘Perfect Storm’ forming in the condominium market.”

Tomaselli is referring to today’s lower number of transactions, lower prices, looming foreclosures and near-record unemployment. “When we see reduced lending in this sector of the housing market, we have to recognize that we will be facing harder times,” he said. “However, there is a solution.”

“Without FHA Project Approval, lenders must decline loan applicants applying for FHA loans as FHA will no longer insure loans in that condominium. The solution will be for the condominium to re-certify their project approval. FHA loan products will become available immediately upon approval restoring the availability of credit within the development.”

Tomaselli advises many, if not most, of his consulting clients to seriously consider FHA Project Approval to create such credit.

For more information, visit www.nationalcondoadvisors.com.

Have a comment on this article? Share on Facebook!

Want instant access to great articles like this for your blog or newsletter? Check out our 30-day FREE trial of REsource Licensed Real Estate Content Solutions. Need easy stay-in-touch e-Marketing solutions too? Try Pop-a-Note for 99 cents!
Join RISMedia on Twitter and Facebook to connect with us and share your thoughts on this and other topics.

Copyright© 2015 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com

Our Latest News >>