Home Selling in 02155>Question Details

kcemail01, Home Buyer in Woburn, MA

How likely is my 2 units condo to be approved by HUD?

Asked by kcemail01, Woburn, MA Tue May 22, 2012

We own in a condo that was converted from a 2 family home. The upstairs condo is about 100ft bigger than ours. We have a buyer who wants to get FHA loan so we have to go through the HUD approval process. How likely will we get HUD approval?

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I just typed a big long answer and got bumped out of Trulia. Wow! Here it is again, in a shorter version, coming from an experienced Medford realtor who runs into this all the time... HUD process is lengthy and involves looking at 1) building 2) finances of ass'n and 3) owner occupancy rates. Check out all of the criteria before deciding to wait for this buyer & make sure your building will qualify. Also, see if the buyer's loan officer is doing all the leg work to get the building approved (most will). Could take a couple of months for approval. Can you wait? Otherwise (the easiest solution since your building is currently not FHA-approved) is to have the buyer(s) check out the Mass Housing loan & see if they qualify. The rate's higher but ends up being less monthly after adding the PMI associated with the FHA loan. The buyer(s) will need to take a 1st time homebuyer class to qualify but should still make for a quicker closing for you. If you still have questions, please call me at 781-608-1157. Best of luck.
1 vote Thank Flag Link Tue May 22, 2012
Thank you Loreen, your info is very helpful.
Flag Tue May 22, 2012
Assuming the association is in good financial shape, you should be ok.

The process can be done two ways: submitting the information to the buyer's lender and the lender will review and approve; or, submitting the information direct to HUD and HUD reviews and approves. Can the buyer get conventional financing? If so the process is easier and quicker with the lender doing this. If its a conventional loan, the approval process is much easier.
1 vote Thank Flag Link Tue May 22, 2012
Thank you Richard. The Condo Association is in good financial shape, we do not have any delinquency. The only thing is that the upstairs condo is rented. What we are not sure is concerning the 50% owner occupancy requirement, is it by living area? Or by number of units? Assuming that the lender is willing to review and approve the application, do you happen to know how long will this process take?
Flag Tue May 22, 2012
Don't worry! All is not lost! I recently had the same situation with a condo in Medford. I was the listing agent and the buyers needed the FHA product to purchase my listing. In this particular case, the buyers did not qualify for the Mass Housing loan but most do (and it's a better alternative than the FHA product if one wants to avoid paying PMI). Have they checked that out? If the Mass Housing product won't work and you MUST get the condo complex approved by HUD, the process was very quick with Christina Longo from Prospect Mortgage. She sent me a list of what was needed from the association, we sent it, and she got it done! It was my first time dealing with her (the buyers' agent recommended her) and I was very doubtful that it could be done, but I was pleasantly surprised. The buyers would need to use her to get their financing though. If they are open to that, give her a call at 617 236 7764 (o) or 978 886 9359 (m), Christina.longo@prospectmtg.com. Best of luck!
0 votes Thank Flag Link Tue Sep 18, 2012
It took me 11 months to get approval for my client, I said I would never do it again....
0 votes Thank Flag Link Tue Sep 18, 2012
My guess is 25%. Three out of my last 4 condo applications were rejected because they did not pass the cpm process which is easier than HUD’s review. The good thing is you and the other owner can easily change the bylaws if that is the issue. My bet is the property configuration is going to raise a red flag.

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Tue May 22, 2012
Thanks Jim. May I know what is the CPM process?
Flag Tue May 22, 2012
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