Sunday’s (10.25.09) Seattle Times reported a startling piece of info for those in the condo market…buyers and sellers. The Federal Housing Administration is about to change the rules effective Nov. 2, 2009 for condo borrowers opting for an FHA loan.
Key points to glean from this article: This has major impact to both buyers and sellers. A buyer could be denied an FHA loan because too many in the condo building already have an FHA-insured mortgage. If the buyer can’t qualify for a conventional mortgage, that seller just lost a transaction to sell the condo property. All of those homeowners in the condo complex will see eroding property values beyond that of the housing recession, due to buyers not being able to get financing. In 2009, nearly one-third of all homebuyers are opting for FHA loans.
The National Association of Realtors (NAR) and the National Association of Home Builders are lobbying FHA to elminate or change their rulings. Unless things change, this could leave a lot of condo buyers and sellers stranded, by removing FHA condo buyers from the mix. Is that how we stimulate the housing market?