Posts Tagged ‘seattle condo financing’

Hey kids.  Just a quick reminder.  The $8,000 first time home buyer tax credit is set to expire this November.  Keep in mind that it isn’t enough to have a home under contract by the end of November:

The home needs to have closed by November 30th.

If you have a contract on a home that is set to close in December, you will be out of luck.

Also keep in mind that for FHA financing, which is currently the most common loan type, closing is frequently taking longer then the traditional 30 days.  So considering it is now the second week of September, if you are hoping to take advantage of the first time home buyer tax credit, you should be aiming to be under contract on your first home in the next few weeks. 

Give me a call today if you want to get started on the process.

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Rob Graham, Home Buying Specialist

Windermere Real Estate

206-321-6349

Popularity: 32% [?]

Yes you may be able to buy a Seattle condo in a complex that is not FHA approved if you have been pre-approved for an FHA loan!

I had a great question from a client of mine regarding shopping for a  Seattle condo in a complex that is not FHA approved if your lender has pre-approved you for an FHA loan. 

It is a fantastic question given that FHA is by far the most popular kind of home loan right now.  The reason for this is that it offers the lowest down payment required by the industry, currently 3.5%.   All but two of my current buyers (the rich ones) are approved for FHA loans. 

Condos also represent some of the best and most attractive options for first time home buyers, downsizers and people looking for investment property.  Condos have not seen the recovery that single family homes have yet and many can be gotten for a fraction of what they were worth two years ago. 

So What Is an FHA Loan?  Don’t worry about it.  Suffice it to say it is a specific kind of loan that is backed by the government not private industry.  It offers a low down payment and has greater flexibility on how much a seller can pay for closing costs and where the money for a down payment can come from. (ie. family)

The Federal Housing Administration (FHA) has more stringent guidelines about which condos qualify for an FHA loan.  Basically they want to make sure that it is a good investment.  Some of the items the FHA will site for not allowing a specific condo complex to qualify for FHA financing are:

• Low cash reserves for capital improvements
• Too many rental in a complex
• Pending law suit against the association or builder
• High vacancy rate for new construction
• Pending special assessment
• Essentially anything that threatens the financial health of the association

To try to streamline the process, the FHA publishes a list of associations that are pre-approved for FHA loans.  These tend to be the larger and more well established associations.  But neither the FHA or smaller condo complexes have the capacity or incentive to get the pre-approval.  The Seattle area for example has hundreds of condo complexes.  I have seen the list of those approved for FHA loans and there are only a few dozen on the list. 

If you have an FHA approval and fall in love with a condo in a non FHA complex, that is not the end of the story. 

Because so few associations are approved, there is what they call a spot approval.  Any association representative can fill out the checklist and get it back to the listing agent.  A smart listing agent starts asking these questions when they take the listing but many do not.  If everything on the spot approval passes the FHA guidelines you can proceed as if the complex had FHA approval.

Bottom line:

Even if you have been pre-approved for an FHA loan, don’t limit your search to only

FHA approved complexes.  It requires a little extra gymnastics on

our part to get the approval, but that is why they pay us the big bucks.

Give me a call if you need help.

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Rob Graham, Accredited Buyer’s Representative

Windermere Real Estate

206-321-6349

robgraham@windermere.com

Popularity: 1% [?]