Q&A WITH MARK SPRAGUE
Mission Mortgage is fortunate to have on our staff real estate market expert and research specialist Mark Sprague. Mark is our Director of Business Development and provides valuable insight and guidance on where the real estate market is heading, with a particular focus on Austin. We will be sharing his views and opinions periodically on our blog, starting with this question he was recently asked about condo approvals.
Question: I own a condo in a condominium development that I am trying to sell. I have a potential buyer who wants to use an FHA loan because of its low down-payment requirements, but he says my project is not on FHA’s “approved” list. My question is: does the FHA have such a list? And, if it does, how come my condo isn’t on it and how does it get on it?
Answer: The Federal Housing Administration does indeed maintain a roster of approved condominium and townhome associations. Because of new rules which went into effect in February, if your development does not appear on the FHA’s roster, your potential buyer will not be able to use an FHA-insured mortgage to purchase your unit. Under the new edict, the agency eliminated “spot approvals,” which allowed individual units to become approved for government-backed loans without requiring the entire development or association to go through the approval process. Now the entire development has to apply to FHA for approval before any single unit can appear on that ever-so-important “approved” list. To apply, an association has to submit its entire set of governing documents, insurance, budgets and recorded maps. Before giving its blessing to a property, the FHA wants to be assured the financial condition of your association is strong and that there is no discriminatory language in the governing documents that would violate federal law. Consequently, it can be a long road for your association before you can pack up, move out and let a new owner move in. Mission has a long history of leading the Austin market on Condo approvals. If you have a question concerning how to get approvals, condo financing, etc. pick up the phone and email us at email@example.com.