Are you in the hunt of finding an FHA approved Downtown San Diego Condo or Loft? Or, are you a current home owner looking to get your complex approved to offer FHA Financing? Not too many complexes are FHA approved (Federal Housing Administration Financing) in Downtown San Diego…but this does not mean that they cant be. The U.S. Department of Housing and Urban Development has two different processes available for condo projects to make them eligible for FHA Financing.
The eligibility requirements may limit the number of projects which can be considered for FHA financing. Limitations include:
• No more than 10% of the units can be owned by a single investor
• No more than 15 % if the units can be in arrears (more than 30 days past due) of their HOA dues
• At least 50% of the units must be owner occupied
• No more than 30% of the units in the project can already have FHA financing
• The HOA must have sufficient reserve funds to maintain and preserve all the amenities and features unique to the project
• Insurance requirements among other eligibility requirements apply. For a complete list of eligibility req. visit www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-46bml.pdf
There are two different processing options available for condo projects that are eligible. The HUD review and approval process (HRAP) and the Direct Endorsement Lender Review and Approval Process (DELRAP). According to HUD’s Mortgagee letter, both require full submittal of all of the following.
• All condo legal documents
• Recorded Plat map with legal description
• Recorded covenants, conditions & Restrictions (CC&R’s)
• Signed and adopted bylaws
• Articles of incorporation filed with the state
• Recorded condo site plan
• Plan of evidence of transfer of control
• Proposed or actual HOA budget
• Management agreement
• FEMA flood map
• Outstanding or pending litigation analysis
• Pending special assessment analysis
• Additional requirements apply to condo conversions and project still under construction
There is no HUD fee for either HRAP or DELRAP reviews or approval. However, HOA’s that uses a Property Management Company or attorney to help getting all the documents together might charge you a fee. If a lender prepares all the documents and is able to obtain spot approval for FHA financing, the approval will cover the entire project, and all the other listings in the project will not require separate approval. However, lenders will still need to comply with the checklist of items associated with FHA financing. The HUD certification lasts for two years and the approval process will take approx 30 days if all of the necessary docs are provided.
As a Real Estate Broker representing prospected buyers interested in condos or lofts in Downtown…HUD’s list of approved homes are great. You can search for a home by city and zip code to determine its status. Check it out…visit www.hud.gov, look for “resources” and select “HUD Approved Condominium Projects”.
To read 92101 Urban Living’s former blogs about FHA Financing click on VA Approved Condos & Lofts in Downtown San Diego!, VA/FHA Financing Available at Aria in Downtown San Diego and Afford a Condo or Loft Investment in Downtown San Diego!. ')}