The Federal Housing Administration is expected to roll out a new rule for FHA condo buyers looking to get mortgages. Since the housing market crash of 2008, FHA has eliminated so-called “spot-approvals” for individual condo units. Instead, they would only approve entire condo complexes. The process could take months, and had to be completed by the HOA or management company for the HOA. Because of the cumbersome process, there were very few (if any) FHA approved condo complexes outside of major cities.
On October 15, 2019, FHA will reverse course on that issue and again begin issuing spot approvals for individual condo units. This is great news for many buyers would are looking for low down-payment mortgages on condos, have less than stellar credit, and need an FHA condo mortgage.
On Saint Simons Island, condo complexes are very common, and can be a great buy for first-time home buyers looking to move to the island. Complexes such as Ocean Walk, Island Square, and Island Retreat (just to name a few) are all potentially FHA insurable condos.
FHA will require a condo questionnaire to be completed by either the HOA or the HOA’s management company that will look very similar to the current questionnaires required by Fannie Mae and Freddie Mac.
• Has a CO that was issued at least one year ago or has been occupied
• Has at least five Units
• Is not a Manufactured Home
• Does not have Ineligible Characteristics
• Is not located in an Approved Condominium Project or unapproved phase of a Condominium Project with an approved Legal Phase.
• Is at least 50% owner-occupied (primary homes, or vacation homes that are no rented out)
• No more than 10% of the total units currently have FHA mortgages
This is not a full list, but should give a good idea of what to expect. This mortgage approval process should closely mirror that of FNMA and FHMC, but with slightly heavier paperwork.
If you or your buyer is looking for an FHA condo mortgage on a condo in Glynn County and Saint Simons (or anywhere else in Georgia, Florida, South Carolina, North Carolina, Tennessee or Alabama), call me for more details, or Apply Online to get the process started.