Alaska FHA Condo projects face a tough time ahead. New announcements by HUD, in their Mortgagee Letter 2009-19 will change how we do loans on Alaska Condo’s after October 1, 2009
With the passage of the Housing and Economic Recovery Act (HERA) of 2008, the Federal Housing Administration (FHA) is implementing a new approval process for Condominium Projects to insure mortgages on individual units under Section 203(b).
All current Alaska condominium project approvals will be invalid (with the exception of projects approved on or after October 1, 2008), and projects must be re-approved under the new options available. Once the project is approved, a re-certification will be required every two years to ensure that the project still meets FHA minimum standards.
There will be a two options the lender/builder/developer can choose:
1. HUD Review and Approval Process (HRAP)
2. Direct Endorsement Lender Review and approval Process (DELRAP)
HUD will only accept approval packages for review from a lender or builder/developers
Site Condominiums (a single family detached homes encumbered by a declaration of condominium convenants) is exempt from this process.
The “Spot Loan” approval process is being eliminated. The spot approval process allowed lenders to do FHA loans in a complex that has not been previously approved by FHA.
What this means to you!!!
Expect that the Alaska condo you want to buy may have been taken off the list
Expect to take longer to close an Alaska FHA transaction on a Condo
Most first time homebuyers and empty nesters gravitate to condominiums due to economics. Condo’s are usually less expensive than single family homes, and the HOA dues that are paid monthly by the homeowners often covers the cost for insurance, maintenance, and grounds keeping, making condo living very affordable.
Face it, most 1st time homebuyers don’t have 20% to put down for conventional financing. Home buyers are relying heavily on FHA’s 3 1/2% down payment to get into a home or condo. Now let’s take it a step farther. The average sales price for a single family 3 bedroom home in the Anchorage Alaska area is $295,000.00, but you can’t afford that. However, you can afford that nice 3 bedroom condo just down the road for $150,000.00. Oops, it’s October 30, and the project where this nice condo is located was taken off the FHA approved list, and you now can’t get FHA finanicng.
Alaska FHA Condo Buyers…. Be sure you are working with an experienced FHA condo lender who knows the ropes, and is familiar with these new rules… Have questions??? I have the answers…..
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Jackie Toppin
Mortgage Banker
Mortgage License #100110
Preferred Mortgage
Branch of Residential Mortgage
Mortgage License #100083
3111 “C” Street, Suite 325 Anchorage, AK, 99503 |
Work: 907-261-7655
Fax: 907-261-7543
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