| If you decide to sell your Downtown San Diego condo, | | | | - Individual units must be owned "fee simple" or eligible |
| can your buyer use an FHA loan for the purchase? | | | | for a leasehold interest. All owners should have |
| We keep hearing about how FHA is trying to help | | | | undivided interest in the common areas and there can |
| everyone in this mortgage crisis. Although FHA is trying | | | | be no restrictions on owner usage, i.e., discriminatory |
| to help buyers there are still rules and restrictions. FHA | | | | practices. |
| has two ways for your buyer to use an FHA loan. | | | | - Transfer of title (meaning sale) cannot be restrictive. |
| The first and easiest way is for you to check and see | | | | In other words, current owners cannot "approve" any |
| if your Downtown San Diego condomium project is on | | | | new owners. |
| the approved FHA list. That will be pretty simple to find | | | | - 90% of the units in the project are sold and closed. |
| out because as of today, December 5, 2008, there are | | | | - At least 51% of the project is owner occupied. |
| 7 buildings on the list including Aperture and Atria. If you | | | | This list is not the entire list of requirements, but it gives |
| compare this list to Eastlake projects, you will see that | | | | you an idea why it might be difficult to obtain a spot |
| the Downtown San Diego list is minimal. Why only 7 is | | | | approval in a high-rise building, or even a low-rise for |
| a topic for another day. However, if your project is on | | | | that matter. Many buyers don't have the time or |
| the list, and your asking price falls within FHA loan limits, | | | | patience to have this process unfold. This is also one |
| then make sure your realtor is advertising FHA | | | | of the reasons the builder may not have obtained FHA |
| approved. With an FHA loan, a buyer only has to have | | | | approval in the beginning of the project. There is a |
| a 3% downpayment and that is really attractive to first | | | | myriad of paperwork, whether in the beginning or after |
| time buyers. | | | | the project is completed. |
| What if your project is not FHA approved? Then | | | | If you are thinking about advertising your unit to an |
| there is a process called an "FHA Spot Approval." The | | | | FHA buyer, you can check the FHA approved project |
| rules for a spot approval are a bit complicated, but the | | | | list on the HUD website, or you can ask your realtor to |
| main requirements are: | | | | check with a FHA lender. When the market was |
| - The project needs to be complete | | | | sizzling, FHA loans were not important. However, now |
| - Control of the common areas must have been | | | | that the economy has turned in the recession direction, |
| turned over to the homeowners for at least a year. | | | | FHA eligibility has become very important. It can be a |
| This is a question your HOA (homeowner association) | | | | great selling tool and differentiate your condo from |
| or management company can answer for you. | | | | others in the marketplace. It never hurts to check and |
| - The HOA or management company will have to | | | | see if this is an option for you when you get ready to |
| provide proof of insurance for liability, flood, and hazard. | | | | sell your Downtown San Diego unit. |