Posted by admin | Posted in vacation rentals | Posted on 19-07-2006
Tags: condo, downtown, downtown condo connection, downtown condos, downtown condos austin, downtown condos austin tx, downtown condos columbus ohio, downtown condos grand rapids mi, downtown condos los angeles, downtown condos raleigh nc, downtown condos salt lake city, downtown condos san diego, housing, losangeles, realestate
If you decide to sell your Downtown San Diego condo, can your buyer use an FHA loan for the purchase? We keep hearing about how FHA is trying to help everyone in this mortgage crisis. Although FHA is trying to help buyers there are still rules and restrictions. FHA has two ways for your buyer to use an FHA loan. The first and easiest way is for you to check and see if your Downtown San Diego condomium project is on the approved FHA list. That will be pretty simple to find out because as of today, December 5, 2008, there are 7 buildings on the list including Aperture and Atria. If you compare this list to Eastlake projects, you will see that the Downtown San Diego list is minimal. Why only 7 is a topic for another day. However, if your project is on the list, and your asking price falls within FHA loan limits, then make sure your realtor is advertising FHA approved. With an FHA loan, a buyer only has to have a 3% downpayment and that is really attractive to first time buyers.
What if your project is not FHA approved? Then there is a process called an “FHA Spot Approval.” The rules for a spot approval are a bit complicated, but the main requirements are:
- The project needs to be complete
- Control of the common areas must have been turned over to the homeowners for at least a year. This is a question your HOA (homeowner association) or management company can answer for you.
- The HOA or management company will have to provide proof of insurance for liability, flood, and hazard.
- Individual units must be owned “fee simple” or eligible for a leasehold interest. All owners should have undivided interest in the common areas and there can be no restrictions on owner usage, i.e., discriminatory practices.
- Transfer of title (meaning sale) cannot be restrictive. In other words, current owners cannot “approve” any new owners.
- 90% of the units in the project are sold and closed.
- At least 51% of the project is owner occupied.
This list is not the entire list of requirements, but it gives you an idea why it might be difficult to obtain a spot approval in a high-rise building, or even a low-rise for that matter. Many buyers don’t have the time or patience to have this process unfold. This is also one of the reasons the builder may not have obtained FHA approval in the beginning of the project. There is a myriad of paperwork, whether in the beginning or after the project is completed.
If you are thinking about advertising your unit to an FHA buyer, you can check the FHA approved project list on the HUD website, or you can ask your realtor to check with a FHA lender. When the market was sizzling, FHA loans were not important. However, now that the economy has turned in the recession direction, FHA eligibility has become very important. It can be a great selling tool and differentiate your condo from others in the marketplace. It never hurts to check and see if this is an option for you when you get ready to sell your Downtown San Diego unit.
Sharyn and Victoria Crown specialize in Downtown San Diego and the Coronado real estate markets. Crown & Crown work together not only as partners, but are also mother and daughter. The Crowns’ goal is to maximize their clients buying or selling power and Victoria’s Master of Real Estate Science degree from the University of San Diego enables the Crowns to not only provide emotional support to their clients, but also logical statistics.
The Crowns can be contacted at http://DowntownCrowns.com or properties can be searched at http://MySanDiegoMLS.com
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