What is an FHA loan?
Why is FHA approval important?
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.
Why are FHA loans so popular now?
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.
How does our FHA approval process work?
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.
How long does the FHA approval process take?
So please allow 4-6 weeks from the date on which we receive your materials and other information.