My agent and I saw a condo that I fell in love with. After speaking to the selling agent, my agent said that

Asked by Jasmine, Los Angeles, CA Sun Aug 17, 2008

we would have to pay cash for the property as the city the condo is in doesn't consider it a condo or a single family house and it would not qualify for an FHA loan? Can someone put this in layman's terms?

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Forefront Re…, Agent, Rancho Cucamonga, CA
Sun Aug 17, 2008
BEST ANSWER
Hi Jasmine,
In layman's terms, my best advise is to walk away from this unit. Legally, it may ba an apratment conversion, "condo-tel" or a host of other classifications that,legally, does not constitute a residential dwelling in the eyes of lenders. THe biggest problem is that if you go to sell the unit, the incoming buyer will have the same issues. Generally, "non-conforming" properties are a white elephant all the way through.

If you have any other questions, please don’t hesitate to call or visit our website shown below.

Pat Palmer-Broker/Realtor
Forefront Real Estate
Forefront Mortgage

154 W. Foothill Blvd #A308
Upland, CA 91786

Phone: 909.286.1301
eFax: 909.912.8002
Web Reference:  http://www.ffhomes.net
1 vote
Vicky Chrisn…, , 20176
Sun Aug 17, 2008
FHA does not insure all property types. For condos, the develoment must be approved. I don't think they insure any type of fractional ownership, and I believe to get an FHA on on a co-op it requires a 203B loan. Below is a web site that you might find helpful. Share it with your agent, no all agents (or even lenders) realize this information is available online.
2 votes
Monique & Joe…, Agent, Beverly Hills, CA
Sun Aug 17, 2008
Hello Jasmine,

I'm thinking the property is a tenant in common (TIC). They are very common in areas like San Francisco. They usually require more of a down-payment though. Not a "white elephant". See if the listing agent has any recommendations for people that finance this type of property. Perhaps the owner might be willing to carry the loan. You will need to explore other financing options as this will probably not qualify with and FHA loan.

Best,

Monique Carrabba
Keller Williams Wilshire
mcarrabba@kw.com
The Reavis Group
Eco Broker and Realtor
2 votes
Delores Weav…, , Pomona, CA
Sun Aug 17, 2008
Hi Jasmine,

It is true that if the property is not on FHA's approved list, it will not qualify for a purchase. Unless there is something specifically wrong with the structural frame or build of the home, then there will not be a conventional lender out there that will finance the property. However, you might want to mention to your agent that a NON-CONFORMING LOAN may be the way to go on this transaction. Non-conforming loans have always been around at least for the past 20 years that I've been in the business, and they are here to stay. A non-conforming loan is a loan that does not meet conventional guidelines and is not sold to the secondary market. What does that mean? Simply this, the lender (maybe Chase or U S Bank) that must be selected has to be one that is a "portfolio lender" meaning they will not sell the loan to an investor. Anyway, it's a long story that can best be told with further detailed discussion--if you're interested. To make a long story short, a non-conforming loan would mean that you would have to come in with a large down payment--approx. 35-40%. If I can be of assistance don't hesitate to contact me.

oxcelia1@msn.com
1 vote
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