How does the FHA distribute its goodies?
By demanding a lot of waiting and a lot of paperwork.
If your condo project has missed a key FHA deadline, then your condo will not be eligible for FHA assistance, which will make selling or buying your condo much more difficult.
Fannie and Freddie have sucked up $134 billion in taxpayer assistance over the past three years. The FHA just a billion or two.
Kenneth R. Harney writes:
"This is a travesty" unfolding, said Jon Eberhardt, president of Condo Approvals LLC, a national consulting firm based in Torrance. "You've got thousands of people out there with no idea" that FHA financing could evaporate for them in the near future.
"This is going to be a big problem," said Steve Stamets, a loan officer with Union Mortgage Group in Rockville, Md., with numerous condo clients. "I expect you will have frantic sellers pushing management companies" to get their condo buildings approved.
The eligibility issue dates to November 2009, when the FHA published new rules on the types of condo projects acceptable for mortgages on unit sales and refinancings. The rules were the outgrowth of a review that found the FHA — essentially a government-owned insurance company — had approved thousands of projects over the previous two decades but possessed inadequate current information on their underlying homeowners associations' budgets, legal documents, insurance coverage, renter-to-owner ratios, delinquencies on condo fee payments, the amount of commercial space and a variety of other characteristics that could affect a project's financial stability.
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