Financing in 60653>Question Details

Cmaguire1113, Home Seller in 60653

FHA spot check approval - adequate reserves

Asked by Cmaguire1113, 60653 Wed Aug 26, 2009

I'm waiting to hear if my condo passed an FHA spot check and am wondering what an adequate reserve fund would be. Our monthly dues are $250 and we have 6 units. We have $3000 in reserves...will that be enough? Also, how long does it take to pass a spot check approval on average? Any help is appreciated!

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Hey Cmaguire1113,

There is a lot that goes in to this... nothing to complicated but Phillip responded it depends on several variables. I can't tell you if 3k is enough b/c we dont know the value of the project as a whole; among other factors.

I can tell you that I recently refinanced someone in the Logan Sq area where their building has 3-units and their reserves where significantly more than 3k... this isn't an apples to apples comparison... of course but we'd need more information to really give you a better answer.

Since your post was a while ago - can you tell us what happend here?

Best wishes,

Carlos Lievano
0 votes Thank Flag Link Thu Sep 17, 2009
First, FHA doesn't "spot" check condos unless asked to by a homeowner, association, etc. Their requirement is that 10% of the budget go toward reserves. Since its a 6-unit condo there won't be a huge reserve budget. With all this in mind, if you want FHA financing in this community you will need to have the condo association approved by FHA. The new condo guidelines posted by HUD have been moved back to November 2, 2009. After that time, all condos (new and existing) must be approved by FHA in order to get FHA financing. A Right of First Refusal will be acceptable then. My consulting firm can help you. I can be reached at or by cell at (847)293-2962.

Steve Stenger
Stenger Consulting Services
0 votes Thank Flag Link Mon Sep 14, 2009
3K is not particularly a high reserve fund, but it does depend on the age of the building. I do not think it will be an issue. There are more important items on the FHA punch list than that. I assume your condo docs do NOT contain the 'right of 1st refusal' language, otherwise you are wasting your time.
All loans are taking longer to complete than 3 years ago and especially FHA since it's become more popular. There is just no way to know for sure.
Good Luck!

0 votes Thank Flag Link Wed Aug 26, 2009
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