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FHA loans in San Francisco

by sfishome on August 5, 2009

FHA loans in San Francisco – “spot approval” for your condo.

I just got off the phone with a lender I know at Bank of America who explained that it’s very costly and time consuming for a building to get FHA approved, but very easy for a Buyer to get the particular condo unit they are interested in approved.

There are lots of criteria that must be met, but they are pretty basic and relatively easy info to track down. I’m quite sure the following list is not complete, so call your lender (or contact me and I’ll provide my lender’s contact info) for more details.

1. 7+ unit building – so condos in 2 to 6 unit buildings don’t qualify
2. 51% owner occupied. That’s a pretty low bar if you ask me
3. no “special assessments” in the past 12 months, and none planned
4. no current legal action against the building

The benefits of FHA loans are that as little as 3.5% downpayment is required, and your credit doesn’t have to be as squeaky clean as a “normal” loan.

You might say “didn’t low down with sub-par credit get us into the trouble we’re in now?” To that I’d say ‘yes’, except I’m quite sure you have to prove your income to support your payments which is NOT what was happening in the crazy days that led us into this mess. In addition, San Francisco prices have already dropped, and the belief that real estate will only got up is now gone. Having SOME availability of decent loan products is important. Having a plethora of loan products for anyone who could breath (and some who couldn’t when the con men got involved) was what really got us in trouble.

So if you earn a good income, but don’t have a ton of money saved up, or your credit isn’t what it could be, and you are interested in either a Single Family home, or a condo in a 7+ unit building, be sure to ask your lender how the FHA loan stacks up. For condos, ask the Listing Agent, the HOA Board or the Property Management firm the basic questions about assessments, litigation and owner-occupancy percentage. Your lender should also have a form that will need to be filled out.

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