SOURCE: Mortgage News Feed
If you’re a first-time buyer with a moderate income and not much cash for a down payment on a condo, the availability of Federal Housing Administration financing is a big deal. Not only do you need a down payment of just 3.5 percent, but FHA is also far more flexible on credit compared with other financing sources. With a sub-par FICO score and a high debt-to-income ratio, banks and big investors such as Fannie Mae don’t want to know you. FHA welcomes you with open arms. The challenge for condo purchasers in the past several years, however, has been finding a condo project that is certified by FHA as qualified for mortgages on individual units. Because of controversial eligibility rules imposed by the agency in recent years, the number of certified projects has plunged, with barely 20 percent of previously eligible condo communities now open to FHA loans on units, according to real-estate industry estimates.
As a result, FHA’s once pivotal role in helping first-time buyers and others purchase moderate-cost condos has shrunk from 80,000 to 90,000 mortgages per year during the past decade and a half to 22,800 last year. Read Full Article Here >>
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Each week we post articles on FHA/VA Government news topics, ranging from FHA Direct Endorsement Underwriters, to current FHA underwriting guidelines, to new FHA rules/regulations, FHA compliance, FHA lending requirements and much more! PLEASE NOTE: We are NOT owned, operated or affiliated with HUD, FHA or the Federal Government in any way.