HOW TO BUY A CONDO USING FHA WITH ONLY 3.5% DOWN.
Questions like: How to buy a condo with bad credit? FHA low downpayment for homebuyers? Down payment assistance? No down payment first time home buyer?
New Financing Guidelines Opens Doors for Many More Buyers.
FHA (the Federal Housing Administration) just opened up the opportunity for buyers to purchase condos with as little as 3.5% down. So this will allow people who want to get out of renting, people who have lower budgets, lower credit scores and higher debt to income ratios to be able to purchase a condo which is typically priced less than single-family homes.
Buyers used to need a minimum of 20% down to purchase a condominium. It also used to be that an entire condominium community had to be FHA approved in order for a buyer to be able to put down 3.5% for the purchase. This new program allows the FHA to approve condominium units individually.
Due to their lower average price point, condominiums are a vital source of affordable housing, particularly for first time home buyers entering the housing market. This change will make it possible for a much larger number of people to become homeowners. It will also help sellers of condos by opening up the opportunity to more buyers.
The condo must be your primary residence for this program. Some buyers steer away from condominiums because they feel the condominium monthly fees are high. But what people may not know is that the monthly condo fees include a lot of things that homeowners would pay for on their own separately if they owned a home not in a condo or homeowners association.
Things like insurance on the building, maintenance of the building and roof, water, sewer, cable, internet are all covered in that monthly fee. With condominiums and homeowners associations, you are buying these services in bulk at a discount. With most condominiums, you typically only pay for your electric.
On Wednesday, August 14, 2019, the Federal Housing Administration issued an update to its condominium rules, which go into effect October 15, 2019. The FHA said it expects the updates, which are intended to improve access to affordable and sustainable housing, will allow an estimated 20,000 to 60,000 more borrowers to qualify for condo loans.