Buyers and sellers of Tampa condos know that current lending regulations make it a difficult proposition to sell at best. A strong majority of current buyers are utilizing FHA loans (3.5% down payment), and most condo buildings are not FHA approved. It used to be that lenders could utilize a “spot approval” process to get an FHA condo loan approved. That option goes away on October 1st, 2009. But along with that, any already approved condo buildings will have to go through the approval process every 2 years going forward.
Per HUD:
“Further participation in the program after this two-year period has expired will require recertification to determine that the project is still in compliance with HUD’s owner-occupancy requirement and that no conditions currently exist which would present an unacceptable risk to FHA.”
(Aside: Is the FHA/HUD really that risk averse considering they are financing/insuring such a large percentage of purchases in this current market?)
The alternative to FHA is the good old conventional loan. But nowadays, conventional condo loans require the buyer to come up with 20% minimum down payment. Gone are the days of 100% financing/no-doc loans. It’s either 3.5% or 20%+ (VA and USDA loans offer zero down however). Some condo buildings don’t even qualify for conventional financing if certain parameters regarding ownership and levels of delinquent maintenance fees are out of whack (see related post).
What buildings are already FHA approved? Some examples:
- Skypoint Condos (downtown Tampa) Approved October 1st, 2008
- Harbour Place City Homes (Harbour Island) Approved December 22nd, 2008
- Bayshore Trace (Bayshore Blvd) Approved August 15th, 1986
- Fair Oaks Condos (S Dale Mabry) Approved September 22nd, 1987
Keep in mind that FHA loans limits are such that this really only affects Tampa condos in the sub $300k price range (84% of the current Tampa condos for sale). Luxury Tampa condos are not often purchased with an FHA loan.
So, if you want to sell a Tampa condo, your options are:
- Cash buyer
- Borrower with 20%+ for down payment
- Get your building FHA approved
- Seller financing
Search Tampa FHA approved Condos
[...] Financing A Tampa Condo To Get Even More Difficult [...]
Better make sure, the condo you are making an offer on has no more than 15% of the units behind on their dues, or you won’t be able to get FHA financing.
Some of your condo buyers may be intersted in an article I wrote: 6 things to know before you buy a condo. It has some of the potential pitfalls a buyer needs to research during the due diligence period.
Thanks Erika. Fees have been creeping up here in Tampa to cover rising insurance premiums and to cover non-paying unit owners. As fees go up-condo values go down. There’s only so much $$ owners can squeeze into monthly payments. Thanks for the input.