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The Department of Housing and Urban Development (HUD) recently announced new rules and policies regarding FHA loan approval of condominium units. This is the news realtors, lenders and homebuyers have been anticipating for over a decade because condominiums have become a source of affordable, sustainable homeownership for many families.
 
Individual Condo Unit Approval for FHA Loans
In an effort to promote affordable and sustainable homeownership, especially among credit-worthy first-time buyers, the Federal Housing Administration (FHA) has established a new condominium approval process allowing certain individual condo units to be eligible for FHA mortgage insurance even if the condominium project isn’t FHA approved.
 
In the past, a person who wanted to purchase a condo using an FHA loan had to choose a unit that was located within a previously approved condominium project. In other words, the entire building had to receive approval before a person could buy an individual unit with an FHA-insured mortgage loan.
 
A Change for the Better
This change makes the FHA loan program more flexible and responsive to market conditions. The new rules and guidelines will allow certain individual condo units to qualify for FHA mortgage insurance even if the rest of the project / building has not yet been approved for the program.
 
 So, that condo you or a client wanted, but couldn’t have, may now be FHA approved!
 
Key Highlights at a Glance
  • New single-unit approval process makes it easier for individual condo units to be eligible for FHA-insured financing.
  • First-time home buyers, small families and urban dwellers will benefit.
  • Improves housing affordability and helps homebuyers obtain a low-down payment mortgage.
There are other guidelines as well, in addition to those highlighted above. They will be included within the newly updated Single-Family Housing Policy Handbook, which is available online. Lenders and borrowers can refer to that handbook to learn more about single-unit condo approval for FHA loans or contact your local loan officer at Greenway to learn more.
 
First-Time Home Buyer Advantages
This new change is especially helpful for younger first-time home buyers as well as some seniors. As mentioned before, condos have become a source of affordable homeownership for many. This opens more doors to homeownership for younger, first-time American buyers as well as seniors who are hoping to age-in-place.
 
While the FHA loan program is not limited to first-time buyers, this group accounts for the majority of condo purchases that are financed through the government-backed loan program. According to HUD data, 84% of FHA-insured condominium buyers have never owned a home before. In addition, the new condo rules are expected to significantly increase the number of approved projects.
 
Looking Ahead
As a result of these new rules and policies, the FHA loan program could take a bigger share of the mortgage market in 2020.  Buyers who had to rely on conventional financing in the past to purchase a condo might now be eligible for the FHA loan program.
 
We are here to help answer any questions you may have and see if the property you're looking at is eligible. Contact us today for more information. 732.832.2967
 
 
 
Fine Print:
  • If the non-approved condominium project has 10 or more units, up to 10% of them can be FHA-insured. (To extend eligibility beyond that 10% limit, the entire project would probably have to be approved.)
  • Non-approved projects with fewer than 10 units can only have up to two FHA-insured units.
  • FHA will only insure up to 50% of the total number of units in an approved condominium project.
  • FHA will require that approved condominium projects have a minimum of 50% of the units occupied by owners for most projects.
Eligibility requirements, exclusions and other terms and conditions apply.
 
 

 

There's good news in the home financing world: Lower interest rates make financing a home today cost less than it did last year, even though prices continue to rise.

Look at the difference in the monthly principal and interest (P&I) payment with a 5% jump in price:

You can see the market offers a renewed opportunity to buy at a lower cost. Of course, no one knows how long current rate trends will last.

If you or a loved one is ready to purchase, please remember that getting a pre-approval for your home loan is a good first step. We are glad to discuss the markets, the process, and the many available financing options.

Are you ready to get started? Contact us today!


On November 27, 2018 the Federal Housing Finance Agency (FHFA) announced an increase in the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2019.
 
The maximum loan limit for one-unit properties will be $484,350, an increase from $453,100 in 2018. Release.
 
The decision was based on the recovery of housing prices under the Housing and Economic Recovery Act of 2008 (HERA). They require that the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price.  
 
FHFA third quarter 2018 House Price Index (HPI) reported that house prices increased 6.9%, on average, between the third quarters of 2017 and 2018. The baseline maximum conforming loan limit in 2019 will increase by the same percentage.
 
For areas in which 115% of the local median home value exceeds the baseline conforming loan limit, the maximum loan limit will be higher than the baseline loan limit.  
 
A list of the 2019 maximum conforming loan limits for all counties and county-equivalent areas in the country can be found here.
 
Contact your Greenway Mortgage loan officer today for more details about how the increase can impact you.

2019 Conforming Loan Limits Effective January 2019


The Federal Housing Finance Agency announced Thursday that it is extending the Home Affordable Refinance Program(HARP) through the end of 2018. The program was set to expire Sept. 30.

HARP was initiated in 2009 to help underwater and near-underwater homeowners refinance their mortgage. Since then, the plan has been extended past its intended expiration several times. In 2015, it was extended to the end of 2016. In 2016 – despite FHFA Director Mel Watt’s warning that the program wouldn’t last forever – it was extended until Sept. 30, 2017, in order to serve as a “bridge” to a new refinance program the FHFA planned to launch in October of 2017.

According to the FHFA, HARP is being extended again because of modifications to its High LTV Streamlined Refinance Program, which was created for borrowers who are current on their mortgage but unable to refinance because their loans’ LTV ratios exceed the maximum limits of Fannie Mae and Freddie Mac. The FHFA said it was extending HARP to “ensure that high LTV borrowers who are eligible for HARP continue to have a refinance option.”

“More than 143,000 homeowners could still benefit from refinancing through HARP,” the FHFA said.

You can continue reading more about the extension here

Want to know what the extension means for you? 

Contact us to discuss your situation with one of our loan officers. 


As expected, the Federal Reserve announced today that it would raise interest rates by a quarter of a percent.

“In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent,” the Federal Open Market Committee said in a statement. “The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a sustained return to 2 percent inflation.

The hike marks only the third time in a decade the Fed has raised its benchmark interest rate. The last hike came in December.

This article originally appeared on Mortgage Professional America. Click here to read more. >

 


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