Archive for the ‘FHA Loans’ Category

Buy a Salt Lake City Condo with 5% down Conventional financing

Tuesday, January 11th, 2011

I spoke to my favorite lender this morning and he informed me that he can now offer Conventional financing for condominiums with just a 5% down payment.  The lowest down payment last year for Conventional condo financing was 10% down.  You can get 3.5% down condo financing with an FHA loan, but the condo project has to be on FHA approved list of condos, which is limitted.

This is great for condo buyers and I also think it’s a good sign that lenders are loosening up a little bit.  Since mid 2007, financing for homes and condos has tightened up with lenders less willing to take risk.  This has led to higher down payments, higher credit requirements and fewer loan programs.  5% down payment convnetional loans for condos is a small step in the other direction.

Kevin Coyle
MBA  Principal Broker
SLC Homes
801-243-0699
Kevin@SLCHomeBuyer.com

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Posted in FHA Loans, Salt Lake City condos, Salt Lake County homes and condos, Utah Condos | No Comments »

Down payment can be gift from a family member if you use an FHA loan

Thursday, August 5th, 2010

If a home buyer uses a FHA loan for their purchase of a home, all or part of the down payment can be a gift from a family member.  FHA loans currently require just 3.5% down too.

 

Kevin Coyle
MBA, Associate Broker
Kevin@SLCHomeBuyer.com
801-243-0699 (Mobile)
SLCHomes Real Estate

 

 

 

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Posted in FHA Loans, Salt Lake City homes, Salt Lake City real estate, Salt Lake County homes and condos | No Comments »

More on financing Salt Lake City Condos

Thursday, March 11th, 2010

After writing last weeks Blog entry, I started wondering what percentage of Salt Lake condos actually sold FHA in the last 6 months.  So I went to the Wasatch Front MLS and did a little research.  I chose to evaluate three areas and price ranges.

Area and price range 1 is Salt Lake City, all prices, because SLC has the highest density of condos in the area.  I did a search for condos sold from Gateway to 700 East and from South Temple down to 600 South in all price ranges.

Area and price range 2 was Salt Lake County under $250,000

Area and price range 3 is Salt Lake County above $250,000

Area 1 Salt Lake City all prices:

In the last 6 months, 137 downtown Salt Lake City condos sold and I have listed the way they were financed below:

42% Conventional Loans (57 condos)
29% FHA Loans (40 condos)
27% Cash (37 condos)
2% Other (3 condos)

29% of these condos sold with an FHA loan.  This is a substantial amount and if FHA condo financing was eliminated, this would be bad, but FHA loans for condos aren’t going away, they only eliminated spot check approvals for non-FHA approved condos.  So there will still be a percentage of condos that will be financed with FHA loans, it’ll just be a smaller percentage.  So downtown Salt Lake City looks better than I thought it would.

Area 2, Salt Lake County under $250,000:

In the last 6 months, 913 Salt Lake County condos under $250,000 sold and I have listed the way they were financed below:

25% Conventional Loans (226 condos)
60% FHA Loans (545 condos)
11% Cash (100 condos)
4% Other (42 condos)

60% had FHA financing.  This is significant!  Due to this high percentage, if I was buying a condo in suburban Salt Lake County outside of downtown Salt Lake City under $250,000, I’d be buying one that is in an FHA approved condo complex, even if I wasn’t doing an FHA loan.  I think I’d look at single family homes too.

Area 3: Salt Lake County over $250,000:

In the last 6 months, 85 condos sold and I have listed the way they were financed below:

55% Conventional Loans (47 condos)
15% FHA Loans (13 condos)
25% Cash (21 condos)
5% Other (4 condos)

Here only 15% of condos in Salt Lake County over $250,000 sold with an FHA loan.  This is probably due to the fact that condos over $250,000 aren’t typically bought by first time buyers and therefore the buyers have more of a down payment.  This looks pretty good.

If a condominium project wants to be FHA approved, they can fill out the paper work and try to get FHA approval.  The process takes at least 60 days and can take longer.  Applying doesn’t guarantee approval either.

So it appears that the elimination of spot approvals for FHA condo loans will have the greatest effect on suburban Salt Lake County condos outside of downtown Salt Lake City, under $250,000.  As you can see from the numbers, there are a lot of condos effected by this.

If I was buying a suburban Salt Lake County condo under $250,000, I would buy one in an FHA approved complex even if I wasn’t doing an FHA loan.  Until there are low down payment Conventional loans for condos or FHA reinstates spot approvals, non-FHA condos under $250,000 in our area will be hard to sell.

The Salt Lake City real estate market is constantly changing and having an experienced Realtor to be your guide can make your home search a lot more enjoyable.  If you need help with the purchase of a Salt Lake City home, condo or duplex, contact me.  I’ve been a Salt Lake City Realtor since 1999 and over the last year, 80% of my clients were buyers!

Kevin
Kevin Coyle
Associate Broker, GRI, MBA
Kevin@SLCHomeBuyer.com
801-243-0699 (Mobile)
SLCHomes Real Estate

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Posted in FHA Loans, Kevin Coyle, Salt Lake City condos, Salt Lake City real estate, Utah Condos | No Comments »

Salt Lake City condos harder to finance due to elimnation of spot approvals on FHA loans

Tuesday, March 2nd, 2010

FHA loans have been the recent choice for low down payment residential buyers offering loan programs that require just 3.5% down.  Recently FHA decided that they will only lend on condos that are on the FHA approved condo list.  FHA use to allow for spot approvals if a condo was not on the list and this policy changed in February 2010.

So now buyers of condos not on the FHA approved list will need to go with a conventional loan and unfortunately that means a bigger down payment and higher credit requirements.  I’ve checked with lenders I frequently work with and 10% down is a possibility if you have really good credit, but it’s not easy to find and many lender require 20% down for a Conventional condo loan.

This will decrease the number of buyers for condos in projects that are not FHA approved which will most likely effect values in these condo projects.  FHA approved condos may end up actually benefiting from this and there may be more demand for inexpensive single family homes too, but that’s yet to be seen.

The Salt Lake City real estate market is constantly changing.  If you need help with the purchase of a Salt Lake City home, condo or duplex, contact me.  I’ve been a local Realtor for 10 plus years and over the last year, 80% of my client have been buyers.

Kevin
Kevin Coyle
Associate Broker, GRI, MBA
Kevin@SLCHomeBuyer.com
801-243-0699 (Mobile)
SLCHomes Real Estate

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Posted in FHA Loans, Salt Lake City condos, Salt Lake City real estate, Utah Condos | No Comments »

Salt Lake City Condos: Which SLC Condos are on the FHA Approved Condo list and why is this so important?

Friday, December 11th, 2009

Because of FHA we still have low down payment options, 3.5% down, for the purchase of owner occupied homes and condos in Salt Lake City and across the nation.  There has always been a list of condominium projects that were FHA approved and if the condo you wanted to buy was not in an FHA approved condo project, FHA would allow spot approvals, but that’s about to change. 

 

Spot approval will be eliminated February 1, 2010.  Now the only way to buy a condo with an FHA loan, is if it’s on the FHA approved condo list.

 

 

Low down payment owner occupied Conventional Loans require at least 10% down and good credit.  With FHA, you can buy that condo with 3.5% down if it’s on the approved list and meets the other FHA requirements.

 

  

So is the condo you want to buy on the FHA approved condo list?  Here’s a link to the list:

 

https://entp.hud.gov/idapp/html/condlook.cfm

 

The Salt Lake City real estate market is constantly changing.  Having an experienced Salt Lake City Realtor to be your guide can make your home search a lot more enjoyable.  If you need help with the purchase of a home, condo or duplex, contact me.  I’ve been a Salt Lake City Realtor since 1999 and over the last year, 80% of my clients have been buyers.
Helping Salt Lake home buyers is my thing, so send me an email or give me a ring!

Kevin

Kevin Coyle
Associate Broker, GRI, MBA
Kevin@SLCHomeBuyer.com
801-243-0699 (Mobile)
SLCHomes Real Estate

 

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Posted in FHA Loans, Salt Lake City condos, Salt Lake City real estate, Utah Condos | No Comments »

Salt Lake City condos: New FHA Financing requirements for condos go into affect November 2, 2009.

Tuesday, October 6th, 2009

FHA has delayed the changes to the requirements for financing condos out to November 2, 2009.  The date was October 1, 2009.

This will still likely have a negative effect on the value of Salt Lake City Condos, but some condo projects will be effected more than others.

I recently put a value on a condomimium in an upscale condo project where units are selling for $250,000 to $325,000 and noticed that all of the units that sold in that complex this year were purchased with conventional financing.  It seems like a unit in that complex would be effected less by these changes.

Time will tell how the value of Salt Lake City condos are effected by these changes.  Some projects will be effected more than others.

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Salt Lake City condos: New FHA Financing requirements for condos go into affect October 1, 2009. What are they and how will they affect the value of Salt Lake City condos?

Wednesday, September 9th, 2009

Starting October 1, 2009, HUD has new rules for FHA loans that will change the playing field for condo buyers, sellers and builders.  I just read the letter from HUD to FHA lenders and appraisers (MORTGAGEE LETTER 2009-19) along with some blogs on how this will affect the condo market.

 

The reason this is such a big deal is that right now an FHA loan is the only way to buy a Salt Lake City condo or home with a low down payment of 3.5%.

 

Here’s an overview of some of the requirements that a condo project will require to be eligible for FHA financing starting October 1, 2009.  I’ve made a few comments:

 

1.     At least 50% of the total units must be sold prior to endorsement of any FHA mortgage on a unit.  This will affect new construction!

2.     At least 50% of the units must be owner-occupied or sold to owners who intend to occupy the units.  There have always been owner-occupied rules for FHA.

3.     Projects of four or more units will have no more than 30% of total units insured by FHA.  Projects with three or less units will have no more than one FHA insured unit.  This is a big change!

4.     No more than 15% of total units can be in arrears (more than 30 days past due) of their condominium association fee payment.  Seems to make sense to me.

5.     No more than 25% of property’s total floor area can be used for commercial purposes.

6.     One investor may own no more than 10% of units.  This applies to developers/builders that rent vacant and unsold units.  This makes sense.

7.     For two and three unit projects, no single entity may own more than one unit; all units and common areas must be 100% complete; and only one unit can be conveyed to non-owner occupants.

8.     A current reserve study must be performed to assure that adequate funds are available for the funding of capital expenditures and maintenance.  A current study must be no more than 12 months old—if recent events or market conditions have affected the finished condition of the property that information must be included.  When reviewing the study, consideration must be given to items that have been replaced after the time that the reserve study was completed.  This makes sense to me.  Why should we lend money to buy condos in a condo project that isn’t properly managed?

9.     No more FHA Spot approval on individual condo units in non-FHA approved projects.  The project is either FHA approved or it’s not.  Seems like this is a safe approach for a big organization like HUD.

 

These new rules will most likely have a short term negative effect on the value of Salt Lake City condos and condos across our nation. 

 

 

New construction condos will be affected the most because 50% of the units will need to be sold before the condo project could become eligible for FHA financing.

 

Builders will need to make sure they have a way to finance the first 50% of the condo units they sell.  The builders will need to go out and find financing for their units and then once the units are half sold, FHA financing becomes available if they are approved.  This puts a lot more risk on the builders and their lenders and less on FHA/HUD.

 

These new rules will likely reduce the number of risky condo projects and the overall number of new condo projects being built.  Long term, condo inventories will decrease which should push values up.

 

Also, if you can’t buy a condo, you can still buy a single family home with an FHA loan.  Short term this could have a positive effect on the value of single family homes in Salt Lake City because more people will buy homes instead of condos.

 

During the last housing boom in Salt Lake City, 2005-2007, the value of homes out paced condos until the gap was big enough to pull condos up.  The same thing could happen again.

 

So short term the FHA loan changes for condos will probably have a negative effect on values, but long term this will probably lead to decreasing condo inventory which could have a positive affect on the value of existing condos.

 

This also could result in new loan products for condos with low down payments.  Also, FHA may modify these new rules as they see how it affects the condo market.  Rules can be changed.

 

If you need help with the purchase of a Salt Lake City home, condo or duplex, please contact me.  I’ve been a Salt Lake City realtor for over 10 years and this year 85% of my clients have been Buyers of homes and condos in Salt Lake.

Kevin Coyle

Associate Broker, MBA

SLCHomes Real Estate

Mobile: 801-243-0699

Office: 801-466-8977

Kevin@SLCHomeBuyer.com

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Posted in FHA Loans, Salt Lake City condos, Salt Lake City real estate, Salt Lake County homes and condos, Utah Homes | No Comments »

How to Buy a Salt Lake City Home, Condo or Duplex if you lack the Down Payment and Closing Costs

Thursday, July 23rd, 2009

Just a few years ago there were many ways to buy a Salt Lake City home, condo or duplex with no money down.  You could borrow 100% of the money you needed to purchase the home.  At that time, the market was going up and lenders were loose with their money.  Times changed quickly and those home loans are gone.

 

So how do you buy a Salt Lake City home, condo or duplex if you lack the down payment and closing costs?

 

FHA loans only require 3.5% down for the purchase a home, condo or duplex as long as the buyer intends to move in and occupy the home as their primary residence.

 

FHA also allows for a family member to gift all or part of the down payment and closing costs.  So if your mom, dad, grandpa, grandma or other family members are doing well, they can give you a gift for all or part of the down payment and closing cost for the purchase of your Salt Lake City home, condo or duplex.  It has to be a gift, not a loan.

 

Also, if you don’t have the closing costs, they are frequently negotiated into the deal so that the Seller pays all or part of the Buyer’s closing costs.

 

Regarding Salt Lake City condos, the condo project must be FHA approved to qualify for an FHA loan.  FHA might do a spot approval if the condo is not FHA approved, but that isn’t a sure thing.

 

And I mention again, the buyer must move into the home and occupy the property as their primary residence.  If you’re an investor breaking the rules and get caught, FHA will call the loan due and mess up your life, so please don’t do that.

 

If you need help with the purchase of a Salt Lake City home, condo or duplex, please contact me.  I’m an experienced Salt Lake City realtor and the majority of my clients are buyers of Salt Lake City homes and condos.

 

Kevin Coyle

Associate Broker, MBA

SLCHomes Real Estate

Mobile: 801-243-0699

Office: 801-466-8977

Kevin@SLCHomeBuyer.com

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Posted in FHA Loans, Kevin Coyle, Salt Lake City condos, Salt Lake City homes, Salt Lake City real estate | 2 Comments »