Every other day or so we field a lead that is interested in a condo or townhome here in the Valley. Many of these leads are first time home buyers, and after looking at either the new listings or the foreclosures, they do the math in their heads and reach out to us very very excited.
Unfortunately, due to the reality that is the FHA, many of them do not feel quite as good after learning about the harsh realities of condos and the FHA.
The Good News
The FHA offers amazing opportunities for first time home buyers. This is pushed pretty hard by the media, and in truth it’s a great program because it really gives new home buyers a chance to get out of the rental market and into ownership without having to put a mammoth amount down.
The Bad News
The FHA loans do not apply to condos with a high delinquency rate, condos with too many owners who are investors, etc.
Yes, the FHA has stipulations in order to achieve this amazingly low entry fee.
And unfortunately, these stipulations are not widely known.
Sorry to burst anyone’s bubble with this post. I just feel that it’s such a let down to hear that instead of the $5,500 someone thought he or she was going to need to get into the $150k Reseda condo, the truth is that it can be closer to $30,000 down.
What ends up happening to many of these individuals is that it’s a return to the rental market for a little longer than they’d hoped.
Yes, there are condos out there that are approved for FHA loans, but we’re finding more and more are not equipped to pass FHA stipulations.
Here’s to a day in the not so distant future where nearly all condos will pass FHA stipulations, and we’ll again see a normal market behave as it does for first time home buyers across the board!