Condos For Sale In Minneapolis: help for condo buyers in the Temporary Approval Provisions for the Federal Housing Administration(FHA) Condominium Project Approval Process
To help assist the sale of condo units, the FHA released a letter addressed to mortgage lenders on September 13, with policy adjustments and needed improvements to assist Twin Citis condo buyers facing undue purchasing challenges. Home Destination, a Minneapolis area residential professional Realtor with RE/MAX Results believes that the policy adjustments should help the housing recovery and boost current housing market conditions in the Twin Citis.
FHA Letter To Mortgage Lenders
The FHA letter to mortgage lenders released on September 13, 2012 helps make investors take advantage of condo for sale that have otherwise sat too long in a cumbersome lending process of tight regulations. September's FHA letter To mortgage lenders puts in place temporary condominium project approval guideline changes to several overly-challenging FHA condominium approval policy provisions. These changes replace, for the period specified by this ML, certain approval requirements specifically identified in this ML that were established in ML 11-22 and the attached Condominium Project Approval and Processing Guide. The FHA press release stated, "It was determined that certain policy adjustments were needed to address current housing market conditions".
Condo Owners Find Help With New FHA Mortgage Lending Policies
Home Destinations is aware of many condo owners who have wanted to sell their unit and couldn't seem to without the benefits this easing will offer. At the same time prospective homeowners have sought to buy these units and could not gain financing that fit the tight lending conditions. The new FHA mortgage lending policy adjustments bring relief and hopes that condo units sitting too long amongst Minneapolis foreclosed homes have a better chance to sell.
For more information, read our post titled Condo Owners Gain Help Setting Aside Property Tax Funds: CFPB.
Minneapolis and St Paul duplex sellers have a reach to buyers seeking condo's for sale.
For the week ending November 12, 2012, there were 11 Twin Cities duplex, triplex and fourplex sellers who received and accepted offers on their properties. Of these, 45 percent were traditional sellers with equity in their properties.
The number of pending transactions is down slightly from the same November week in 2011, just 21.4 percent of last year’s sales belonged to home sellers with equity. This year-over-year increase in equity seller market share resulted in an average off market list price of $132,118 for the week this year; up slightly from last year’s average sold price of $129,089.
More good news was reported for the levels of newly listed duplexes on the market as well. The week saw a 13 percent increase over last year. Traditional sellers dominated this year’s market, contributing 65 percent of the week’s new lisitngs.
"This is excellent news for sellers, buyers, condominium communities and the housing market across the country," said Thomas Skiba, the association's CEO, said in a statement. "We hoped this would happen a lot sooner, but it's an important step in the right direction. This will spark home sales and help tens of thousands of condominium communities begin to recover from the housing slump, and that can only help the national economy."
Property Sales Continue To Rise In August
"For buyers seeking multiple condos units for sale in one complex, the larger the complex the safer you are because there is more money to hire a professional management firm and people who are available for the board of directors, who may also have a personal investment motivation to be sure everything runs smoothly. The smaller the condo complex an investor may be considering, buyers may have a greater exposure to risks. Condo buyers may find themselves in a tangle with fewer partner dollars to sort it out" advises Jenna Thuening, owner of Home Destination.
A Minimum Of 30 Unites Must Be Sold First To Gain An FHA Mortgage Endorsement
The notable changes in condo lending policy requirements are found in Section 3.4. are replaced by the following updated policy guidance. At least 30 percent of the total units must be sold prior to endorsement of a mortgage on any unit. This pre-sale requirement is not applicable to existing projects or non-gut rehabilitation conversions, which require a 50 percent owner-occupancy percentage. While these changes are clearly temporary, the additional flexibility was welcomed by the Community Associations Institute, a trade group that has aggressively lobbied for easing of the more stringent rules put into place in 2010 and 2011. While being better implemented in the long run, today it helps both homeowners the FHA better steward its funds.
Another significant policy update, which will remain in force for almost two years, includes easing the requirement that legislated the number of units in a building that can be delinquent on homeowner association dues. With the new changes, no more than 15 percent of a building's units can be more than 60 days delinquent. The previous rule tolerated only 30 days delinquency, making it harder for struggling homeowners to avoid lending limitations and stop foreclosure proceedings.
The pre-sale percentage must be documented in one of the three following options:
Copies of sales agreements and evidence (loan commitment) that a mortgagee is willing to make the loan.
Evidence that units have closed and are occupied.
Information from a developer/builder that lists all of the units already sold, under contract, or closed. This can be some form of documentation used for the company‟s own tracking purposes as long as it is accompanied by a signed certification from the developer.
Condo Buyers Due Diligence Process
Homeowners seeking to buy a condo sometimes find requirements for an attorney‟s certification confusing in the mix of condominium certifications. According to the press release, "The FHA does not require an attorney‟s certification. However, mortgagees, builders/developers, homeowners‟ associations, management companies, or project consultants may obtain this as part of their own due diligence process. This document does not replace other required condominium certifications that are required to be executed".
Condo Buyers Gennerally Gain Safety In Size
Condo investors should keep in mind that generally the larger the condo complex the safer you are because there is more money to hire a professional management firm and people who are available for the board of directors. The smaller the condo complex, the more likely you face more risks carrying the potential that you will be left with a tangle you may not be able to get out of.
Condo Owners Gain New Support
This year, the Consumer Financial Protection Bureau (CFPB) released a new performance guide for mortgage lenders under the Dodd-Frank Act. Although most of the new rules are set to go in effect in 2014, some revisions to the Truth in Lending Act (Regulation Z) were implemented on June 1 2013, bringing immediate help to ensure creditors establish escrow accounts for certain mortgage transactions. This transulates into the means for condo owners to have extra funds permitted and set aside for property taxes and premiums for homeowners insurance. "We recently issued several mortgage-related rules, most of which will take effect in January 2014. We are now focusing intensely on supporting the implementation process for those rules, and have proposed some clarifications and amendments to the rules to address questions raised by stakeholders. We are also working to complete a rule to integrate and streamline federal mortgage disclosures," the CFPB stated.
Home Destination, a Minneapolis Certified Distressed Property Expert and professional Realtor with RE/MAX Results, helps homeowners determine when it makes sense to refinance and to understand their local housing market. Homeowners seeking to buy a condo or apartment in Minneapolis and St Paul real estate communities will appreciate Home Destination's no-pressure well-informed decision making process. Start by the added knowledge a buyer gains by working through a mortgage worksheet helps condo buyers to prepare for a mortgage loan and call Jenna Thuening at 612-396-7832.
Jenna Thuening, a Certified Distressed Property Expert offers lead information on short sale increases and current short sale levels.
Eden Prairie MN 55344
Jenna's home page: homedestination.com
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