Are You Selling Your Condo – Is It HUD Approved? (FHA Mortgage)

24 Oct No Comments jctrano Buyers, Community, Condominium, Experiences, FHA, Helpful Hints, HUD, Information, MA, Market Trend, Mortgage, Property Type, Sellers, Single Family, Trend, Uncategorized , , , , , , , , , , , , , , , ,

Condo for Sale - FHA and HUD ApprovalYou’ve decided to put your condo up for sale, its a good market and you’re ready to sell.  You’ve taken the steps to prepare your property, you’ve removed clutter, completed minor touch ups and secured the services of a competent real estate agent.

The condo market is strong in your town; many prospective buyers use conventional loans, however there is a growing market that use alternative mortgage instruments, like FHA mortgages (Federal Housing Administration).  You may have discussed, with your Agent, buyers with pre-approvals for FHA loans.  If your unit is not HUD (Housing and Urban Development) approved, you may lose out on a pool of buyers.  Some first time home buyers take advantage of the lower down payment required by FHA mortgages, making home buying easier.  Having your Condo HUD approved does require some documentation and being prepared is a must.

Some Information and Required documents may include, but not limited to the following:
*HOA (Home Owner Association) Condo Questionnaire (completed & signed by a trustee who is not a party to the trans.)
*Current budget  – must show income & expenses (Include a reserve component of no less than 10% of projected income)
*Prior year financials if available; and/or bank statement(s) for HOA
*Unit Certificate of Insurance showing types, amounts of coverage & deductible amount(s)
*Preliminary title report (Closing Attorney to provide)
*Copy of Recorded Master Deed, Site Plan & Executed Declaration of Trust & By-laws (closing attorney to provide)
*H.O.A, Tax ID #
*Month/Year Condo was completed
*Minutes from the past two H.O.A. meetings, if available (see below)

HUD - FHA Approved Loans

*Letter on HOA letterhead signed by a trustee who is not a party to this transaction which includes the following:
        – State that the condo is self-managed
        – If minutes/notes are not taken at HOA meetings, this must be indicated
        – State whether there is any outstanding or pending litigation
        – State whether there are any special assessments
        – State whether there are articles of incorporation for this condo (there may not be)

If you want to be prepared, consider collecting the required information.  If your condo has no association, you may want to consider the impact on selling in the future.  You generally see HUD approved condos in buildings, but there is no limitation on what type of building can be HUD approved.  HUD approved condos can be in two units homes (duplexes, 2/3 homes, etc.).

Please be sure to consider all the options available to you and for the buyers interested in your home.  If you have any questions or need assistance, contact me.

Special thanks to Meredith Spence, Mortgage Professional – Wells Fargo