News
Many first time buyers would like to take advantage of the current $8,000
tax credit opportunity offered by the government. Often the best or only option for a first time home buyer is a condo purchase. Buyers with moderate income are also looking for a low downpayment mortgage option.
Historically, a Federal Housing Authority (FHA) loan has proved helpful for first time buyers, offering as little as 3 percent down payment loans on qualified properties. But as we discussed last week, the lending climate has left would-be condo buyers struggling to find affordable financing because of underwriting restrictions on condo projects.
Banks can make loans with local underwriting, but many new buyers don't have the required 20 percent or more down payment to obtain these alternate loans. So, the new resident buyer in Summit County, where the condo is a staple product, is left wondering how they can take advantage of the tax credit. The National Association of Realtors (NAR) is working
with the FHA on new guidelines which may serve to help our situation.
Investor/owners in condo projects may soon benefit if an effort by the NAR to change FHA funding rules is successful.
Recently, the NAR asked the FHA to make its rules for owner occupied condos to more closely match Fannie Mae and Freddie Mac guidelines.
Prior to now, the FHA would not insure mortgages in complexes where more than half of the units were owned by investors, or were rental properties.
That placed certain complexes off limits for buyers wanting FHA financing and the low down payment opportunity that comes with FHA loans. Recently, however, the FHA lowered the owner-occupancy ratio requirement to 50 percent. In this community, certain projects will still have a hard time qualifying... Fannie and Freddie still have trouble with condo loans, but the NAR continues to work toward solutions that will help to breathe life into the real estate market.
The NAR also asked the FHA to allow loan applicants who plan to live in the condo units they purchase to obtain mortgage insurance — even if more than fifty percent of the units in the project are investor-owned or rental. If FHA were to do that (as Fannie and Freddie already do) it would help to open up the condo market, which will help new buyers.
The NAR also asked the FHA to lift the agency's “concentration” requirement, which prohibits additional FHA loans to be made in condo projects where 30 percent of the units already have FHA-insured financing.
These are small steps, and the NAR is also working hard to help lenders and appraisers navigate new standards. Watch this column next week for more on how your Realtor can help with the appraisal process, when maybe your Lender cannot.
Your agent can only call him or herself a Realtor if they are a member of the National Association of Realtors. Make sure your broker is a Realtor.
Butch Elich and his team includes
associate broker, Paula Parker. Find them on the Web at www.elich.com, or at RE/MAX Properties of the Summit,
305 Main St., Frisco.
tax credit opportunity offered by the government. Often the best or only option for a first time home buyer is a condo purchase. Buyers with moderate income are also looking for a low downpayment mortgage option.
Historically, a Federal Housing Authority (FHA) loan has proved helpful for first time buyers, offering as little as 3 percent down payment loans on qualified properties. But as we discussed last week, the lending climate has left would-be condo buyers struggling to find affordable financing because of underwriting restrictions on condo projects.
Banks can make loans with local underwriting, but many new buyers don't have the required 20 percent or more down payment to obtain these alternate loans. So, the new resident buyer in Summit County, where the condo is a staple product, is left wondering how they can take advantage of the tax credit. The National Association of Realtors (NAR) is working
with the FHA on new guidelines which may serve to help our situation.
Investor/owners in condo projects may soon benefit if an effort by the NAR to change FHA funding rules is successful.
Recently, the NAR asked the FHA to make its rules for owner occupied condos to more closely match Fannie Mae and Freddie Mac guidelines.
Prior to now, the FHA would not insure mortgages in complexes where more than half of the units were owned by investors, or were rental properties.
That placed certain complexes off limits for buyers wanting FHA financing and the low down payment opportunity that comes with FHA loans. Recently, however, the FHA lowered the owner-occupancy ratio requirement to 50 percent. In this community, certain projects will still have a hard time qualifying... Fannie and Freddie still have trouble with condo loans, but the NAR continues to work toward solutions that will help to breathe life into the real estate market.
The NAR also asked the FHA to allow loan applicants who plan to live in the condo units they purchase to obtain mortgage insurance — even if more than fifty percent of the units in the project are investor-owned or rental. If FHA were to do that (as Fannie and Freddie already do) it would help to open up the condo market, which will help new buyers.
The NAR also asked the FHA to lift the agency's “concentration” requirement, which prohibits additional FHA loans to be made in condo projects where 30 percent of the units already have FHA-insured financing.
These are small steps, and the NAR is also working hard to help lenders and appraisers navigate new standards. Watch this column next week for more on how your Realtor can help with the appraisal process, when maybe your Lender cannot.
Your agent can only call him or herself a Realtor if they are a member of the National Association of Realtors. Make sure your broker is a Realtor.
Butch Elich and his team includes
associate broker, Paula Parker. Find them on the Web at www.elich.com, or at RE/MAX Properties of the Summit,
305 Main St., Frisco.
