FHA loans have changes coming for condos

These changes will have an impact on Tysons Corner and it’s communities, such as: The Colonies, Fountains at McLean, Gates of McLean, Lillian Court, McLean Hills, McLean Chase, Westwood Village, and others.  Her is some information by a guest contributor to this Tysons Corner, McLean + Vienna blog.

FHA Condo Update
By FHA Specialist Brig Light

This update contains the temporary changes to the FHA Condo Approval Process as outlined in Mortgage Letter 2009-46 B.

Here are the 6 things you need to know about these changes:

1. These temporary changes are effective on December 7th, 2009 through December 31st 2010; except for Spot Loan Approvals.

2. Spot Loan Approvals will be eliminated as of February 1st, 2010.

3. FHA loan concentration may be increased to 100% if the following criteria are met: a. Project construction has been 100% complete for at least 1 year, b. All units have been sold and no single entity owns more than 10% of the units, c. Project holds 10% of the budget in reserves for capital expenditures and deferred maintenance, d. Control of Home Owner’s Association has been transferred to the owners, and e. Owner-occupancy is at least 50%.

4. FHA requires a 50% owner-occupant ratio but bank-owned units that are either vacant or tenant-occupied are not required to be included the calculation.

5. New construction pre-sale requirement is temporarily reduced to 30%.

6. Florida projects must be approved by the Atlanta Home Ownership Center. Lenders are NOT allowed to approve them.

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