FHA Changes Will Make City Condo Sales Easier
July 6th, 2009 categories: Chicago Info/News, Economic Recovery, For Buyers, For Homeowners, For Sellers
It’s no secret that the Chicago condominium market is in a slump. Developers overbuilt during the housing boom, and now unsold condominium units are clogging the city market.
This is bad news for anyone trying to sell a condominium. There are simply too many units out there for too few buyers. Part of the problem is that it’s always been more difficult to obtain mortgage financing for condo units than it has been for single-family homes. This cuts down on the number of buyers who can even attempt to buy a city condo.
But the FHA last month approved a change that may make it easier for sellers to move their city condo units, and for buyers to purchase them.
The new FHA guidelines spell out changes in the way lenders approve financing for condo units. The guidelines are complicated, but if you’re trying to sell a condominium unit, there’s one thing you need to know: The new guidelines will make it easier for potential buyers of your condo to qualify for FHA financing.
This can only help you move that condo. It opens the door to a wider pool of buyers. In fact, this story on the Web site of the National Association of REALTORS says that a growing number of condo boards are voting to approve building-wide approval from the FHA.
If an entire condominium building has FHA approval, buyers can get their mortgage loans in as little as two weeks and, even more importantly, with a down payment of as little as 3.5 percent of a condominium unit’s purchase price.
The truth is, many first-time homebuyers looking to spend less than $500,000 on a condominium, are hoping to obtain FHA financing. For many of these buyers, it’s the only way they can afford to buy a condo.
The FHA condo-approval changes, then, will have a dramatic positive impact on the residential real estate market because a greater number of first-time buyers will be able to purchase units. Sellers can then move on to buy their own residences, whether they’ll invest in another condo or a townhome or single-family home.
We often complain when government entities enact legislation that makes our lives more difficult. In this case, though, it’s time to appreciate the government: The FHA changes just might help boost the city’s stagnant condo market.
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What exactly changed? Your post states a conclusion but no specifics.