Have you thought about FHA financing?

The Iowa Finance Authority just sent me the current interest rates on mortgages.

They have many mortgage options available for different lending needs.

Now, there is an option available if you are thinking about buying (or selling) a home in an Association – FHA financing!

Last week the Federal Housing Administration revised some of the rules for condo associations across the country to get certified or re-certified for financing. This is HUGE because it opens individual unit owners up and sellers to FHA-insured mortgages with low down payments.

This revision should open up the condo real estate market in the Cedar Rapids area because it gives buyers easier way to fund their condo purchase and sellers more potential buyers.

There are other revisions to the FHA rules for condos like “raise the permissible investor-ownership limit; and increase the percentage of non-residential, commercial use allowed in an FHA-certified project.”

This will definitely help the financing of single units under an association. Previously, the entire association would have to be FHA certified before one unit could receive FHA insured financing. The entire association would have their project budgets, reserves, forthcoming capital improvement needs, insurance policies, delinquent payments of association dues, composition of renters versus owner-occupants, and various other factors reviewed.

Now, with the revised rule, only one unit would have to qualify to the FHA standards and rules. Now the signer of the FHA application would have to say to the best of their knowledge and belief, their information they entered on the application is accurate, has been reviewed by an attorney and complies with local and state regulations. Also by signing the application, they are also saying they know of no known construction defects, “operational issues,” or legal problems.

This rule change is temporary until fully implemented – it is a “work in progress”.

Some of the other changes to the FHA financing rule which would have effected your ability to finance are:

  • The investor ownership limit in existing projects is now 50 percent rather than a 10% limit on the number of units owned by any single investment company.
  • Condo associations in which as many as 15 percent of unit owners are 60 days delinquent on their condo fees will now be eligible for certification. Under the previous rules, no more than 15 percent could be 30 days late. This was a major issue for many associations since they didn’t track 30-day delinquencies. Industry groups had sought a 90 day delinquency standard.

If you think living in an association may be a great way to own a home in the Cedar Rapids area, contact me today.

If you are thinking of selling your home in an association, you will want to discuss how this new rule change effects the ability to sell your home in today’s real estate market in Cedar Rapids.

I’m here to help you every step of the way – give me a call and let’s get going!