How does somebody buy a condo that is not an FHA approved project? (its only at 24% sold so far). I want the condo, but no bank will write me a loan.

Asked by Scott Connerly, Kansas City, MO Mon Apr 9, 2012

The condo association is http://delofts.com
It does not meet these requirements for DERLAP:
• At least 90% of the units in the project must have been sold.
• At least 51% of the units in the project must be owner-occupied.

Help the community by answering this question:

+ web reference
Web reference:

Answers

7
Patti Ann Ka…, Agent, Coon Rapids, MN
Fri Apr 13, 2012
You could purchase it with Cash, a Conventional Mortgage, or it may be possible to get the Seller to give you a Contract for Deed. Even though you cannot get an FHA mortgage, there are other financing options. Contact a good Mortgage Broker they should have the widest range of available options.
0 votes
Elizabeth Fu…, Agent, Wayzata, MN
Tue Apr 10, 2012
Remember the old "buyer beware?" Yours are common concerns and not to be taken lightly. However, you can't figure out everythiing in advance. Almost all townhome and condo associations are currently wrestling with this problem. I would advise having your realtor find a place that has what you need and want and remember there is no guarantee for the future. Your realtor can check for places that are lender approvable Use your resources. Liz
0 votes
Lenny Frolov, Agent, Brooklyn Park, MN
Tue Apr 10, 2012
To my knowledge there is no way to get around the FHA rules. You will have to get a different kind of loan to purchase this unit.
0 votes
Susan Hoffla…, Agent, Shoreview, MN
Tue Apr 10, 2012
Well, Scott, they either come up with cash to buy it. Or they secure private financing (a Contract for Deed through someone) or they secure conventional financing. Most likely, if this project has such a long way to go, even a conventional loan would require a substantial amount down.

And, I agree with Jim. The FHA has their restrictions for a reason. Not only to protect them and the lender, but you as well. If this project is in this state now, what kind of guarantee do you have that it would be any better by the time you sell? I mean, what if your life changes and you need to sell in a year or 2? I've experienced some condo projects that started off great and exciting and ended up in major litigation with the builder, developer, title companies, etc. What a mess!!

General rule of thumb, unless you can afford a loss, don't jump in to a purchase that's problematic before you get there.

Good luck!!!
Web Reference:  http://www.homestosellmn.com
0 votes
Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Tue Apr 10, 2012
What is your exit strategy if you find a way to buy it? Most buyers only focus on getting in, they give absolutely no thought to selling it later. If you are having trouble financing it, what happens when you want to sell it? Good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
Web Reference:  http://jamessimms.com/
0 votes
Mack McCoy, Agent, Seattle, WA
Mon Apr 9, 2012
This is probably why the price is so attractive - demand is reduced because, as you're finding out, they're hard to buy.

All the best,
0 votes
Ieasha Howel…, Agent, Oklahoma City, OK
Mon Apr 9, 2012
You must purchase the condo with only a conventional loan (usually meaning more money down) or cash. FHA will not allow you to purchase a condo that doesnt meet the requirements.
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more