Condo Lending Relaxes
After more than a year of stringent lending guidelines, the Federal Housing Administration is temporarily easing up on insuring loans on condominiums.
Condos were hit hardest by the national housing decline, especially in Florida, and buyers have found it extremely difficult to get financing on condos. The FHA has refused to lend at all in some condo buildings considered to be highly unstable. For the more stable condo communities, they required 20%, 30% or even 50% downpayment from the buyer.
The FHA uses specific guidelines to determine whether a condo building is stable enough to lend in. They consider the number of renters in the building versus live-in owners, the total number of units in the building that are FHA financed, the financial stability of the building, etc.
The decision to loosen these guidelines is expected to boost the number of sales in struggling buildings and improve the condo market, helping to fill the units and lower the number of foreclosures.
For some qualifying condo communities, buyers may be able to take advantage of the FHA low-downpayment program of only 3.5%, similar to those available for town homes and single family homes.
If you're considering purchasing a condo, this might be the perfect storm of buying potential: temporarily relaxed guidelines for condo financing, the home buyer tax credit available until April 2010, and very low prices on condos.
For condo listings in Jupiter, FL and all of Palm Beach County, click here.