There are many reasons why FHA (Federal Housing Association) financing is a good choice for buyers on either end of the scale, whether these are young, first-time buyers, or seniors who own condo units and need a reverse mortgage to supplement their post-retirement incomes. It offers 3.5 percent minimum down payments and is very lenient on credit scores and debt-to- income ratios, for a start.
But until recently it has been a closed shop to many buyers due to its strict certification requirements. If a condo building is certified as ineligible, all the individual units are ineligible for mortgage financing. The FHA in recent years has removed the ability to take out “spot” loans on individual units.
Housing and Urban Development secretary Julian Castro announced that this may all be about to change. Revisions to FHA rules on condos have been completed and await the final seal of approval from the Obama administration. These revisions include changes to the most controversial of the FHA’s rules: the certification procedures that have excluded thousands of condo buildings from eligibility.
It remains to be seen whether changes to other controversial aspects of the FHA’s policies will be on the agenda – such as the return of spot loans or relaxation of restrictions on commercial space in condo buildings. All of these would make FHA the useful tool it is designed to be for young buyers and seniors.
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The attorneys at Valanzola Law are highly experienced in real estate matters from the perspective of buyers and sellers alike. We believe in building a productive partnership with our customers and in tailoring solutions to your individual needs. Please contact us to see how we can help.