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How to Improve Condo Sales in Today’s Market
FHA is a government-backed loan which allows the buyer to purchase a property with 3.5% down and some extra money for closing costs which can be paid by the seller or the bank if it’s a short sale. FHA loans are attractive to low income buyers because they allow lower FICO scores and higher “ratios” of the total housing cost paid by the borrower to income. Sometimes, FHA ratios can go to 50%, 55% or even 60%, allowing the buyer to purchase a condo for little money down even though the monthly cost of ownership represents a significant portion of the monthly income.
Today, depending on the area, FHA loan limits run as high as $729, 750. Condos that cost more than that are considered luxury properties and are not eligible for an FHA loan guarantee.
Today, because money is tight and appraisals are often arbitrary due to new regulations, FHA-backed loans are becoming more popular and necessary to sustain the housing market.
In 2010, close to 50% of all loans were FHA, up from 3% in 2007. Big jump!
Today’s condo owners should make sure their complex is FHA approved. If it’s not, you are missing a big chunk of the market. If you are a buyer using FHA or not, it should still matter because of what it means for resale down the road. If you buy into a non-FHA approved complex, then you may have problems selling it, too.
To find out if a condominium complex is FHA-approved, go to http://www.fha.gov, enter your complex’s information and voila! you will know. If you a buyer and want the real lowdown on the complex, and that is vitally important information to have-go to Check FHAA which for a small fee tells you about approval, and outstanding liens, pending litigation, percentage of units financed by FHA, percentage owner-occupied or investor-owned.
There is no better way to increase the marketability of your condo complex than by getting your complex to FHA approved.