It is more important that ever for Condo projects to either keep their FHA and VA project approvals, or if not already approved, submit the paperwork to get approved. Orange County, CA, along with most of Southern California, has a high concentration of condo projects, yet a high percentage of these projects are not approved for FHA or VA financing.
Why is it important for Orange County Condo Projects to be FHA and VA Approved?
Over the past few years home financing has gone through dramatic changes. Guidelines have tightened up. Lenders are especially wary of condo projects and have begun to look very closely at the financial strength of individual associations. Most of the time nobody realizes there is an issue until a seller can’t sell their home, or has to sell at a great depreciated price since the pool of buyers is limited to those who are not using FHA or VA financing. FHA and VA financing combined for more than 35% of all loans in Southern California in 2009. Orange County First Time Buyers looking to buy a condo start with a list of FHA or VA approved projects. Projects not on the list are not even considered in the home buying process.
FHA Eliminated the Spot Approval Program
Up until late 2009, FHA allowed for “Spot Approvals“. A Spot Approval was the financing of one unit in a project that was not approved. That is no longer possible. Now, the project needs to be approved. VA allowed financing on projects that were on the FHA approved list, even if they weren’t on the VA approved condo list. Now, FHA has changed the rules for project approval. VA will still allow financing on FHA approved projects, but it depends on when the project was FHA approved, along with a few other factors.
How Do You Get a Condo Project Approved for VA or FHA Financing?
There is definitely the easy way and the hard way. The hard way to to do it yourself. You will need to put together a package that includes the budget, reserves, financials, investor concentration, etc. Here is the link to the FHA Condo Approval process. The easier way is to hire a company that specializes in getting Condo projects FHA and VA approved. Most of these companies charge a reasonable fee and will handle the process from start to finish. It’s not fun to deal with FHA or VA, so putting this in the hands of a company that does it full time is a great way to go.
With FHA loan limits in 2011 for Orange County at $729,750, and VA loan limits for 100% financing at $700,000, having your condo project approved will help to keep your property value as high as possible. *updated for 2011
Authored by Tim Storm, an Orange County, CA VA Loan Officer – Please contact my office at Emery Financial Group for more information about an Orange County, CA home loan. 877-786-4243 x 7.
Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.
877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com