 What HUD Changes Could Mean For You
First time home buyers make up a large portion of home buyers overall. It is also these applicants that may have a hard time finding financing through condominium approval company institutions. Either it isn’t affordable due to a higher interest rate because of lack of credit or because of their income level. Either way it makes it harder for them to qualify for traditional loans.
The FHA Program
The FHA doesn’t actually make the loans, they insure the loans. Qualified lenders are able to approve loans to people that otherwise wouldn’t qualify and the FHA insures those loans in case of borrower default. Many credit-worthy borrowers and projects may not meet conventional underwriting agreements. This program encourages lenders or a condominium approval company to finance them. However, loans can only be approved for properties that meet certain requirements. This includes condominiums that meet certain standards.
Not only does the condominium approval company program allow lenders to approve loans they normally wouldn’t be able to but it also offers down payment assistance and redevelopment programs.
The Benefits This Program Offers to Home Buyers are:
- Down payment assistance
- Low credit score requirements
- Flexible income requirements
This increases the market of potential buyers helping to sustain and even raise market values. There is a large part of home-buyers that will need FHA loans in order to become buyers. Without getting HUD approval your community is missing out on a lot of potential homebuyers. This could have a negative impact on market value and the condo community.
Don’t Delay in Getting HUD Certified
You can’t offer your community to those that require FHA financing until your condominium community is HUD certified. If your condominium approval company didn’t recertify in the last year it is likely that your community is no longer on the HUD certified list. This could affect how many people will qualify for financing to purchase a home in your community. HUD certification can take weeks or months to approve.
Having your certification expire can cause a lot more problems; you don’t want that to happen. Check your certification status today. You don’t want to have any unexpected delays in the process.
Spot Approval in the Past
Before the HUD changes, something called spot approval was possible. This required home-buyers to get FHA financing approval on an as needed basis. This meant that the condominium approval company didn’t have to have full approval. It was a one at a time process. That is no longer available. This is probably the biggest change that HUD as made. This has left many communities scrambling to get certified for FHA loans. If you understand the importance and value this holds you will want to get working on certifying or recertifying as soon as possible.
Many home buyers that know they won’t be able to afford conventional financing will only be able to look at HUD approved properties. This could be devastating for your condominium approval company. The largest part of homebuyers is those that qualify for this program. This leaves out a lot of potential homebuyers.
Without the option of more affordable financing this could cause the market value of your properties to drop due to lack of appeal to buyers. FHA loans are easier to obtain and appeal to a wide variety of buyers. Because of their affordability more people are becoming home owners.
What Are the Other Changes?
Besides the loss of spot approvals HUD has also made other changes that every condominium approval company needs to be aware of.
First, a mandatory recertification was required for 2010. Did your condominium approval company become recertified? If not we can help. We have over 30 years combined experience writing FHA loans. We have helped many condo communities become HUD approved in order to offer FHA financing.
Recertification is now required every two years. If you fail to recertify your community will fall off the HUD approved list. This means less people will be able to look at homes within your community that are for sale. This not only affects future home buyers for your area but also current homeowners. Being unable to sell homes could lower market values within the community.
You can see how these major changes can affect everyone from the condominium approval company, potential homebuyers and current homeowners. It’s important not to delay getting certified with HUD to be able to offer FHA financing for homes available in your property. |
