After three months of house hunting, auto technician Mahyar Abab and his wife, teacher Ana Abab Marques, are in escrow to buy a home in the Mission Courts condos in Rancho Santa Margarita.
But landing an Orange County home of their own for under $400,000 wasn’t exactly a picnic.
As first-time homebuyers using Federal Housing Administration (FHA) financing, only about half of the condos on the market had the necessary certification that would allow them to buy, said their agent, Bob Wolff.
And without FHA, the Ababs would continue to be renters. With FHA, they only need to put about $13,000 down, or 3.5 percent of the purchase price.
“It’s hard to save for the down payment. It’s hard to save for the closing costs,” said Ana, 44. “Also the price is a little high at this time. And there’s a lot of competition. We made an offer on five places.”
The Ababs were competing with buyers paying 10 to 20 percent down, and in some cases, paying all cash. Some sellers also believe – erroneously, Wolff says – that the FHA process is more rigorous than conventional financing.