Frequently Asked Questions

It means to obtain an FHA loan, forward or reverse, purchase or refinance, in an association that isn’t approved by HUD.

Yes, the association must still meet all of the current HUD requirements for full project approval.

Because the FHAFAX report tells you on day one, not weeks later, whether the condominium is eligible under this program and why. The Single Unit Approval program is a great program but like all great works, it has a flaw. The flaw is that you won’t know your unit is eligible until the lender’s underwriter says so, and this is typically three weeks into the transaction. By then you have paid for an appraisal, purchased condominium documents, had inspections on the property, and might be outside your contingency period to get back your deposit.

The Direct Endorsement lender (DE) who funds the mortgage makes this determination when they underwrite the loan.

Yes and no. There is a limitation under the Single Unit Approval program that only 10% of the units in the association may be FHA loans before the association must obtain full FHA project approval.

Where this is the case, the association must obtain full FHA project approval.

No, 2-4 units must obtain full approval.

An FHA loan is simply a mortgage insured by the Federal Housing Administration. The Federal Housing Administration is part of the United States Department of Housing and Urban Development (HUD), an executive branch Cabinet department.

Due to recent changes in federal law and policy, it is now necessary for an entire condominium or townhome development to obtain FHA approval from HUD in order for an FHA loan (purchase or refinance) to be possible for even a single condo or townhome unit.

In 2006 FHA loans accounted for less than 2% of the mortgage market; now almost half of all new mortgages are FHA.

Since many buyers today can only purchase with an FHA loan, FHA approval means a bigger pool of potential buyers. With a bigger pool of buyers, units sell faster and will fetch a higher price due to the law of supply and demand.

With FHA approval, your association will have something that competing associations don’t have, namely an edge on sale prices. You’ll also give prospective buyers and owners added reassurance, since being an FHA-approved condo or townhome development means a safe investment and an association that is on good financial footing.

FHA loans require only a 3.5% down payment, the lowest of any loan program available. A conventional loan typically requires a 20% down payment. FHA loan credit qualifying requirements are easier to satisfy.

Maximum FHA loan limits have recently been increased to as much as $793,750 (depending on region), allowing many more units to be purchased with FHA loans than ever before.

The general unwillingness of today’s lenders to extend credit with respect to conventional loans and residential real estate in general means that many borrowers find FHA is their best bet. Lenders don’t seem to mind lending when the federal government (FHA) insures the loan, assuring them of repayment in case of default.

Unlike other mortgages, FHA loans are fully assumable. This means that when a seller with an FHA loan sells his or her property, the loan and its financing terms (interest rate) can be transferred to the new buyer. This unique feature will certainly make a property more valuable and easier to sell in times of rising interest rates.

When you call us at (818) 707-0258 our FHA specialists will ask you a few simple questions about your association. If you are a good candidate for FHA approval (the minimum requirements are met), we’ll send you a contract and invoice.

Upon receipt of a signed contract and payment, we send you a detailed list of the documents required for the HUD submission, tailored for your association. Once we receive your documents, we do all the rest.

We pride ourselves on our quick turnaround time and submit your materials to HUD within days of receiving your information and documents. At this time, however, there is currently a 4-6 week waiting period at HUD, due to a significant backlog of cases there.

So please allow 4-6 weeks from the date on which we receive your materials and other information.

Before you initiate the process of getting your condo association FHA Approved, we suggest that you CLICK HERE to look it up on the HUD roster of FHA Approved condominium projects.

The only way to currently get access to our data and technology, is through the Multiple Listing Service enterprise license. If you are an agent, contact your local Association of Realtors (AOR) or Multiple Listing Service (MLS).

We offer daily web service of our data, which is the most current and up to date data available.

Yes, as long as your MLS service is accessible with a hand held device.

Yes, both FHA and VA web service is available.

FHA loan guidelines require a minimum 3.5% down payment, the lowest down payment available.

Credit requirements (FICO scores) are not as strict as is the case with conventional loans.

Any FHA/VA mortgage is fully assumable, which means that the seller of a property that currently has an FHA/VA-insured mortgage can offer the financing and terms to the buyer. Assumability will be a huge benefit to a future seller when interest rates turn higher; not only will the sales price be higher because of the attractive financing, the pool of qualified buyers will be larger due to the lower monthly payment that comes with a lower interest rate.

FHA-insured mortgages have a refinance option that requires no appraisal. This option has allowed many homeowners to reduce their monthly payments even when their property was worth less than what was owed, a benefit that would not be possible with any other type of mortgage.

FHA’s 203K program lends money to purchase a property and rehabilitate it, with no payments due for 6 months. The 203K is the only loan of its type.

An FHA borrower unable to continue making their payments can petition for HUD assignment. If the default is due to circumstances beyond the borrower’s control and it’s possible to return the loan to performing status within a three-year period, HUD will defer foreclosure and take assignment of the mortgage. As part of the assignment, HUD can temporarily reduce or forgo mortgage payments.

The EEM allows an FHA purchaser to borrow up to $8,000 to make a subject property more energy efficient. Qualifying for this loan is not necessary. The loan proceeds can be used to purchase energy-efficient appliances, fixtures, insulation, weather stripping, and solar enhancements.

The FHA anti-flip rule (that in the past prohibited FHA from insuring a mortgage on a home where the seller owned the property for less than ninety days) has recently been eliminated. Fannie Mae and Freddie Mac require a 6-month waiting period for a buyer purchasing from an investor.