FHA CONDO APPROVAL – PROS/ CONS & MISCONCEPTIONS

What are the benefits of FHA condo approval?

1 FHA condo approval dramatically increases the pool of potential buyers

Statistics show that approximately 60% of new homebuyers intend to use an FHA Loan. If your community does not have FHA condo approval, you potentially limit the buying pool to only 40% of homebuyers. NOTE: These are “regular” buyers – an FHA loan is not associated with low-income HUD programs, such as Section 8. In some counties, an FHA insured loan can reach amounts of $800,000.00 or more. Since the recession, most American buyers are using FHA insured loans, and this will be the trend for years to come.

2 Increased Home Value

FHA approved Condos have a larger pool of prospective buyers, therefore increasing competition and demand for the product. This can result in higher purchase prices and an increase in market value. This will increase the value of units throughout the community.

3 FHA Loans are Assumable

This means that in the future an FHA Loan can be assumed (including the interest rate) by a new buyer. With interest rates at an all-time low, this can be a very valuable asset to an HOA community.

4 Marketability

Some real estate agents won’t show units that aren’t FHA Approved. Being approved sets your community apart from others in your same area.

5 Awareness

Going through the FHA condo approval process gives your Homeowners the sense that you as a Board cares about the community and wants it to thrive. By avoiding the approval process it will hamper your owners when they go to sell their units.

6 Less Renters in the Community

Generally speaking, Buyers who use FHA loans are more likely to reside in the unit, and not rent it out. Conversely, communities without FHA approval will attract buyers that can make large down payments. These buyers are usually investors who will rent the property for a profit.

7 Fiduciary Duty

Board Members and Property Managers are expected to maintain property values in their communities. Several HOA attorneys advise that it is the fiduciary duty of the condo Board to apply for FHA condo approval to maintain or increase property values for residents.

 

What are the cons of FHA Condo Approval?

There are no “cons” to being FHA Certified. Remember, chances are, your community was certified when it was developed. Most communities in the US are currently seeking FHA eligibility, but may not meet the strict FHA guidelines, and will not qualify. Misconceptions regarding FHA Condo Approval:

Misconceptions of Obtaining an FHA Approval

1 Being FHA Certified will bring in “low-income” buyers – FALSE

This is completely false! FHA Condo approval is completely unrelated to affordable housing programs. The FHA can insure loans upwards of $800,000.00 in some areas. Since the recession, most American buyers are using FHA insured loans, and this will be the trend for years to come.

2 FHA Loans caused the mortgage crisis – FALSE

FHA loans are not Sub Prime Loans. Although they do offer lower down payments than traditional mortgages, there are credit score requirements, debt to income analysis, and income verification. Also, in 2009 FHA loans made up about 2% of the loan market, in 2010 they were up to 40% and climbing.

3 The guidelines are too strict and it’s cost prohibitive – FALSE

Well-managed and financially stable communities have no trouble becoming FHA approved. The cost has dropped dramatically since 2010. When the guidelines initially changed, Attorneys were charging upwards of $5,000 to review the documents. My team and I at The Federal Savings Bank work with the Condo Association to obtain all documentation and submit directly to HUD for FHA Approval for a very low fee of $0. That’s correct! I charge $0.00

If you or anyone you know lives in a condo development, call me today!

-Alexander Romo

Senior Vice President -Mortgage Lending

312-738-8430

The Federal Savings Bank

NMLS 217060

 

Filed under: Mortgage Advice, Alex Romo, Alexander Romo, Conventional mortgage, fha, FHA CONDO, FHA CONDO APPROVAL, FHA Loan, FHA Loans, fha mortgage, The Federal Savings Bank

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Alex Romo – Senior Vice President – Mortgage Lending

312-738-8430

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Filed under: Housing Market, Mortgage Advice, Alex Romo, Alexander Romo, credit repair, CREDIT REPAIR PROGRAM, FHA Loan, fha mortgage, Home loan, Home Purchase, Pre-Approval, Senior Vice President, The Federal Savings Bank, The Romo Report, VA Loans

What To Remember When Applying For A Mortgage

In my last post, I discussed which banks have the tendency of denying you home loan.  A big part of this problem are the caliber of employees handling your loan and the other are just the banks rules on approving each loan (specific bank overlays).

Applying for a mortgage is the most important step in the home purchase process.   As part of my loan application process, there are important key points I make sure to discuss.  There are very important items to remember to do and of course not to do.

A few things you should do are:

1. Ask you Mortgage Banker questions – if you’re not sure, ask. The banker is the expert and should be able to answer all financing questions
2. Provide accurate information –  i,e. accurate term on a job/length in present address etc.
3. Know the loan terms – Ask the difference between FHA vs. Conventional – Fixed vs. Adjustable Rate

A few things you should not do:

1. Don’t lie on your loan application – be truthful on your intentions of occupying the home, source of down payment etc.
2. Start a loan process when you wont be available – Do not start the loan process if your planning a long vacation, go on maternity leave etc.
3. Make major financial changes – do not change jobs, open new bank accounts, open new credit debt or make large purchased such as a car etc

Contact me today to discuss any questions you may have in regards home financing.

Filed under: Mortgage Advice, Alex Romo, Alex Romo Report, Alexander Romo, Conventional mortgage, fha mortgage, loan application, Mortgage rates

GET FULLY APPROVED TODAY!!! I will make you into A CA$H BUYER in this tough market!

Filed under: Housing Market, Mortgage Advice, Alexander Romo, Approval, fha, fha mortgage, Home Purchase, homebuying, homeownership, Housing Market, Mortgage, mortgage commitment, Mortgage rates, Pre-approved, Real Estate, residential mortgage, The Federal Savings Bank

5 Possible Outcomes of Higher Mortgage Rates

 

At the beginning of May the average mortgage rate for a 30-year FRM was just 3.35 percent. Since then, as tracked by weekly surveys from Freddie Mac, rates have risen aggressively, and as of August 22, the average rate on that same 30-year FRM was 4.58 percent.

Much of the mortgage-rate discussion thus has dealt with numbers, specifically, how much homes sales will be impacted. So for this story, we wanted to take a look at some broader market forces, and how the rising mortgage rates could impact those elements.

1. Housing demand could fall – There are two sides to the housing demand element, both very interesting. On one hand, consumers buy homes with the future in mind, so if mortgage rates appear to be rising, consumers may be incentivized to buy now before rates get any higher. On the other hand, though, the speed in which rates increase also matters, and if rates rise too quickly (as they have the last couple months), they could scare buyers away.

2. New buyers will not arrive – Falling mortgage rates entice many consumers to consider homebuying, but there’s little evidence that rising interest rates have the same effect. Again, consumers who were already considering homeownership may expedite their purchase to lock in low rates, but the renter with no interest in homebuying will not likely follow suit.

3. Rising rates are bad for the high-end and low-end – Both entry-level and affluent homebuyers are most affected by rising mortgage rates. Whereas first-time homebuyers are priced out by rising rates, move-up buyers who were considering homes in the $1 to $2 million range may forgo a new purchase and decide to renovate their existing residence instead. According to a recent analysis by the Wall Street Journal, the monthly payment on homes with a 10 percent downpayment has gone up by 13 percent with the rate increases.

4. Investors are in a quagmire – Though many investors, noted the Journal, may be excited by the rate increases, given that they eliminate many potential competitors by making home purchases more costly, some may also be turned off by the increases, especially with how difficult it has now become to find the ridiculous bargains of 2009 and 2010.

5. The housing rebound will not end – Some spectators have feared that the rising mortgage rates will prematurely end the housing rebound, but that will only happen if rates continue to rise at their mid-summer pace, which is unlikely. Instead, what we’ll probably see is a slowdown of home prices, and a return to the steady, consistent growth that has typically categorized the housing market.

                                                                                                                                                                                                                                                                                                                                                                      by Peter Ricci

– See more at: http://chicagoagentmagazine.com/5-possible-outcomes-of-higher-mortgage-rates/#sthash.kDJtV7q9.BBxHIOeE.dpuf

Filed under: Housing Market, Alex Romo, average mortgage, business, economy, fha mortgage, first time homebuyers, housing affordability, Housing Market, Mortgage, Mortgage rates, Mortgages, Real Estate, residential mortgage, rising interest rates, The Federal Savings Bank

Immigration Reform Could Add 3 Million Homeowners

A new study has found that passage of immigration reform would allow approximately 3 million new homeowners to be added to the housing market. According to the National Association of Hispanics Real Estate Professionals, it is expected that around 6 million undocumented immigrants will attempt citizenship, and of that 6 million, half are expected to become homeowners. Juan Martinez, NAHREP president said, “foreign-born householders have a high value and strong desire for homeownership.” More here

Filed under: Housing Market, Alex Romo, Alex Romo Report, Alexander Romo, fha mortgage, FHA Refinance, FHA Streamline refinance, Home Purchase, homeownership, Housing Market, immigrants, Juan Martinez, Latinos, Mortgages, NAHREP

FHA Mortgage Premiums To Increase!

EXTRA EXTRA!!!!  READ ALL ABOUT IT!

FHA is changing! Premiums to increase! Don’t wait any longer! Buy today!

Click on the picture below to read my full article

Filed under: Housing Market, Alex Romo, Alex Romo Report, Alexander Romo, Chicago, economy, existing home sales, fha, fha mortgage, FHA Refinance, FHA Streamline refinance, fixed rate mortgages, homebuyer tax credit, Housing Market, Morgage Advice, national association of realtors, Pending home sales, Real Estate, residential mortgage, The Federal Savings Bank, year fixed rate mortgages

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Filed under: Mortgage Advice, Alex Romo, Alexander Romo, business, Closing costs, credit consultation, economy, fha mortgage, FHA Refinance, FHA Streamline refinance, Housing Market, mortgage lates, No Appraisal, No Income, Real Estate, The Federal Savings Bank