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FHA Condos and Spot Approvals

Yesterday, we screwed up and put the wrong Subject Heading with our commentary. Because this might have prevented some of you from reading it, we are repeating the info we sent regarding FHA Financed Condos, as we consider this extremely important. The main fact to note is that Spot Approvals remain available until Feb. 1st. Remember that FHA financing goes to $729,000, so Condos in high costs areas that used to be far out of FHA range are now well within FHA range. We just closed another $600,000 FHA Condo Loan today in fact, with a Spot Approval.

Below are the NEW FHA guidelines for condominium financing. Note that only a very few lenders still do Spot Approvals, but we have wholesale access to those lenders, and we have become experts at garnering Spot Approvals.

Extends the “spot approval” process until Feb. 1, 2010, allowing individual units to qualify rather than requiring an entire building to earn approval.
Temporarily increases from 30 percent to 50 percent the number of units in a building that can be financed with FHA loans.

Requires 50 percent of units to be owner-occupied, but temporarily allows vacant, bank-owned or rented units to be excluded from the calculation.
Allows for condo board approval of buyer unless it violates the Fair Housing Act.

Removes legal certification requirement for condominium documents.
Bars approval for buildings with more than 15 percent of units delinquent on association fees.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167