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FHA Criteria and Challenges for Will County and Chicagoland Condominiums


FHA Criteria and Challenges 
for Will County and Chicagoland Condominiums


     Many young First-Time Home Buyers are currently facing challenges as they enter the housing market.  No doubt about it, the recent economic downturn hit the young generation hard.  

     Young Buyers have Student Loans staring them in the face.  Others are struggling as they search for careers, employment, and decent wages.  Their credit and ability to save for a down payment can take a backseat as they focus on other elements of their life.

     Because of these things, many Will County and Chicagoland-area hopeful young Buyers are turning to  Condominiums  and  Townhomes  as prospects for their first home purchase.  They consider these properties an easier entry point into the housing market.  Rightfully so, as often the prices are more favorable ... and the money needed for down payment and Loan Closing is less too. 

    Over the past few years, FHA's lower down payment requirement (now only 3.5%) has been very attractive, especially to young First-Time Home Buyers.  FHA (Federal Housing Administration)  mortgages have enabled many young Buyers with limited down payments to dip their toes in the housing market waters.

     Recent changes to FHA  have now erased some of those advantages and currently made Conventional Mortgages a competitive financing option once again.  Still, FHA financing can be a great choice for the right Home Buyer.  (How do you know which type of financing is the right financing for you?  Your  Mortgage Lender  will conduct a thorough mortgage analysis.  Only through that analysis will you find your best financing options.)

    For those Buyers that hope to buy a Condominium and have reached the conclusion that an FHA Mortgage will best fulfill their financing needs ... the next step is to find a Condo in a Project or complex that is FHA-Approved.  Townhome-style units that are not legally classified as Condominium ownership, do NOT have to be FHA approved, as they are treated like a Single-Family home.

     What criteria is placed on complexes in order to become FHA-Approved?  FHA states ...     

         
     "The FHA only insures loans on Townhomes and Condos if the complex contains 2 or more units.  The Townhome Association must provide hazard and liability insurance, and buildings containing financed units cannot exceed 4 stories.   Commercial enterprises cannot occupy more than 25% of the overall complex, and no individual can own more than 10% of the Units in 1 complex.   The FHA also requires that at least 50% of the units are owner-occupied and that no more than 15% of the property owners are delinquent on Townhome Association fees."


     The above criteria often makes it challenging for Condo  complexes to qualify for FHA-Approval.  It's also makes it challenging for Condo complexes to stay FHA-Approved, as complexes are required to requalify for FHA approval when FHA changes its guidelines.

     The recent economic downturn reflected in the majority of housing markets across the U.S. contributed greatly to those challenges a complex currently faces regarding qualification.  Properties bought in higher numbers as investments fell into foreclosure.  Condominium Associations and their finances were hard hit.  Association Dues  were often left unpaid or in arrears.  Needed property repairs, upkeep, and maintenance was often neglected or ignored.  All greatly impede FHA qualification for a complex.

     I did a little search on the HUD.gov  - U.S. Department of Housing and Urban Development website to see how many complexes within Will County, IL were once FHA-Approved and still remain so.  Unfortunately for those currently hoping to buy a Condo in a Will County FHA-Approved complex, the pickings are very slim.  For those surrounding areas checked, the number of choices looked sadly similar.  (Contact me for the latest updates.)

     For Home Buyers considering this mix of purchase and financing, I strongly urge and recommend that you seek out the services of an experienced and knowledgeable Mortgage Lender well-versed in Condominium FHA Lending.  The same suggestion goes for choosing an Agent to work with.  These transactions can be more difficult and intricate in nature.  

     FHA Criteria and Challenges for Will County and Chicagoland Condominiums ... working with professionals that have background and experience in these types of transactions is a huge advantage.  Your purchase and financing will go much more smoothly and quickly if you take this important step and follow my advice ...  



*   Hoping to Buy a Condo, Townhome, or other property in Will County, DuPage County, or elsewhere in Chicagoland?  Contact me today!  I'll put my 36+ years of mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:
Direct:  815.524.2280
Cell/Text:  708.921.6331
eFax:  815.524.2281
For a FREE Mortgage Consultation, click HERE!

Ready to Apply for your Mortgage?
   
          

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