Home Buying in Miami>Question Details

jeanne516, Home Seller in Miami, FL

If a condo associations HUD approval is expired how do i go about getting it renewed to use a conventional loan?

Asked by jeanne516, Miami, FL Fri Apr 12, 2013

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You can't do that, the association is the responsible to renew it, now when a condo has a HUD or FHA approval, only means you can use Government loan programs to purchase on it, you can buy any condo you want with a conventional loan if the lender allow condo loans, you will need at least 20% down payment.
1 vote Thank Flag Link Sat Apr 13, 2013
Finding an FHA approved condo in Miami is finding the needle in the haystack. If you visit HUD's website you will see for yourself. Unfortunately buying a condo through a conventional loan may become challenging as well. Lenders base their approval on the responses received from the Associations on "The Condo/PUD Questionnaire", number of Owner Occupants vs Tenants, reserves, etc.

If you do not have 20-25% for a down-payment, the solution is moving on to a townhouse. A townhouse, for clarification of other Buyers that may be reading this thread, its not defined by appeal but only by its legal description, the words lot and block must be part of the legal description and the word condo must not.

If you need additional information or need my assistance in any way, please feel free to contact me via my profile.
0 votes Thank Flag Link Sat Apr 13, 2013
Yeah, the days of "spot approvals" are over.

Jeanne, you're probably interested in the property because it is priced lower than a similar unit in an FHA-approved building would be.

Requiring 20% down shrinks the supply of available buyers, which drives the value down. 3.5% down increases the supply, the same way 0% financing lures car buyers.

So, unless you have 20% down, you'll have to ask your real estate agent to narrow the search to FHA-approved projects.

All the best,
0 votes Thank Flag Link Sat Apr 13, 2013
Jeanne,

Awesome question! This is a subject that fits into a category I like to call the "heavy lifting". Short answer is, start by contacting a qualified attorney that specializes in these matters.

The reality of the situation is that there will be much work associated with this process and it will be costly, and....time consuming. Please understand that there are also important variables that will come to bear. Why did this association get dropped? We all know there was a major review of HUD approved list associations and multitudes were relieved of their approvals and often because of good reasons that are intended to protect borrowers. [and who else? you guessed it- lenders, who then will sell those new mortgages to Fannie Mae- the cycle continues] But I digress.

Are you a purchaser or an owner? A purchaser might have fallen in love with the home and would be seeking placement of conforming loan financing. An owner may be refinancing or trying to sell and finding out the bad news. All of these situations are worthy of our best attention.

What's important,

Cash reserves- Does the association meet the standards?
History- Is there a record of fiscal responsibility?
Complications- Have special assessments for needed improvements pushed the finances of the association over the margins of viability?
High foreclosure rate- non payment by owners no longer honoring their obligations?

The entire matter must be examined by quality professionals for viability to re-qualify. Our offices have been through this before and been successful in myriad situations.

Big job, choose your battles wisely. Let us know if you would like more help.
0 votes Thank Flag Link Fri Apr 12, 2013
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