In the ever-changing real estate market it is hard to keep up with everything that is going on.
But there's some important information for you to know if you are buying a home and considering going FHA* in your mortgage. This has the advantage of being able to buy with less money down than a conventional loan and offers a lot of flexibility as to where that down payment has come from, which we have talked about before.
Just to let you know as of the end of September the numbers have changed as far as FHA mortgage limits. For Clinton and all of Middlesex County for a one family the limit went from $417,000 to $320,850, which is almost a change of $100,000. This change reflects the adjustment that we have seen in the real estate market. This is good information to know for buyers and for sellers in the pricing of their homes in the market place.
Now, news you can use if you own a condo in Clinton: currently there is not one condo complex in Clinton that has FHA approval. There were some, but the FHA approval expired for any number of reasons which can be as simple as the complex did not renew the approval in a timely fashion.
It is very important for condos to have FHA approval because many of your condo buyers are first-time home buyers who are looking to go FHA.
Some FHA/HUD potential issues that have an impact on the FHA approval process are:
- The complex may not be HUD approved
- A single owner may own more than 10% of the units.
- More than 15% of the owners are more than 30 days behind in their association fees.
- More than 5% of the total space of the complex has non-residential use (commercial space)
- Less than 50% of the units are owner-occupied
- Projects where the homeowner association owns/operates a non-incidental business.
- The association has less than 10% of the total operating budget in reserves.
- There is pending litigation
So if you are selling or thinking of selling your condo, this would be a good topic to bring up with your homeowners association. The more you can be attractive to a buyer, the better.
*FHA stands for Federal Housing Administration; the FHA is an arm of the Department of Housing and Urban Development (HUD). The primary focus of the FHA is to encourage homeownership in the United States.