You asked, "How do I get around the FHA condo guidelines"?
The only way to get around these gidelines is to put more money down and get a conventional loan.
Until then, you must work thru the system and get the condp project approved with FHA. This takes time and is not always possible.
There are many reasons why the project may not be approved. These rules are there for your protection and for the protection of the taxpayers who stand to loose if you can not pay your mortgage (as has recently happened to many).
I wish you Success & Patience.
Dennis Smith, ABR, SRES, e-PRO, CDPE, RealtorÂ® Lic #00476662
RE/MAX By-the-Sea, Carlsbad CA
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I was on vacation, but wanted to give you another perspective on buying a condo with an FHA loan. I know it's harder now than ever, but the rules are there for the bank's protection - they're protecting their interest, which would be 96.5% of it - against falling values. So, as you pay down that loan, these interests are really your interests.
One huge problem is the amount of renters in the units. Renters historically, don't maintain a property like an owner would, and that can have an affect on value. Also, delinquent HOA fee payments have an affect on owners. Where would the money come from to repair a roof that needs fixing if the money isn't in the reserves, for example? HOA's can slap an assessment on the owners to pay for such things. I've seen poorly maintained complexes, with peeling paint and dry rot - prime conditions for termites. Those fixes are really expensive! Will you have the $$$ to pay for that in addition to your regular payments?
So, if you actually find a lender who'll bypass FHA criteria and you find you need to resell in one of these non-FHA approved complexes, you may end up selling for under what you paid, because you may need to wait for an all cash buyer or an investor. First time buyers rarely have 20% to put down, and investors lowball.
And a 20% down payment doesn't guarantee you'll get a condo either. Conventional loans have condo criteria too. The conditions now are really tough, I know, but worth it to you as an owner in the long run.
Good luck, have patience, and submit strong strategic offers!