In order to get FHA financing on a condo in Orange County, the condo project needs to be approved for financing by FHA. Not all projects are approved, so it is important to narrow the property search to those condo’s that are if you have a desire to take advantage of the benefits of FHA financing.
Benefits of an FHA Loan for Orange County Home Buyers
FHA only requires 3.5% down payment, which is the biggest advantage over most other types of financing. Unless a home buyer has 20% down, or is a Veteran and qualifies for 100% financing with a VA loan, then FHA will be the best way to go. There are a few other specialized programs, such as STRS (Teachers), USDA (properties in rural areas), but FHA is the most flexible program when it comes to credit and FICO scoring and qualifying.
FHA Condo Approval Lookup
To check if a condo is approved it will help to know either the Tract Number for the condo or the name of the condo project. The HUD (Housing and Urban Deleopment) website is the place to go for researching whether a project is approved. Once there, for Approval Method, choose HRAP/DELRAP. Choose how you want your list sorted (if you are checking out a whole city or zip code.) Choose your state. Typically you will want to leave the Condo ID and Condo Name blank. Type in a city and/or Zip code. Choose “A” in the Status drop down menu. This will give you all the results, allowing you to see if a project had been on the list previously, even if its not currently on the list. Click “Send” and the results will pop right up.
How to Decipher the Results from a Condo Approval Search
The results will show projects that are approved, withdrawn, etc. FHA recently changed the Condo approval process, so most, if not all, projects in Orange County will still need to be “recertified” through HUD in order to close an FHA loan.
What if the Condo Project is Not on the List?
If a condo project is not on the list, either it has never been FHA approved or possibly it’s not a condo. Not all projects have been approved, and some projects may not even be approvable because of lawsuits within the condo project, or financial issues that the Association is having. Also, if there are too many rental properties in a project (more than 50%) then FHA will not allow financing. Some properties that are listed as condo’s, and may even look like condo’s, are actually a Townhome. For example, there are quite a few of these homes for sale in Placentia. They are attached, but the property is owned “fee simple”. Townhomes do not need to go through the same rigorous approval process as a condo. Finding a good Placentia real estate agent is important if a buyer doesn’t want to waste time during the initial home search stage.
The first step in determining the best financing for your qualifications is to talk with a lender or Loan Officer who is an expert with FHA financing. Have the loan officer prepare loan scenarios based on your goals and qualifications. From there, a home buyer should have a good idea of what they can qualify for. Every Orange County, CA home buyer should be PreApproved for a mortgage before searching for a home.
Authored by Tim Storm, an Orange County, CA Loan Officer – Please contact my office at Frost Mortgage Lending Group for more information about an Orange County, CA home loan. 877-786-4243 x 7.
Contact us for your Orange County FHA Mortgage:
Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.
877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com
*Licensed by Department of Corporations under the California Residential Mortgage Lending Act. PRMI Branch License 813F487.
<!– –>Authored by Tim Storm, an Orange County, CA Loan Officer – Please contact my office at Frost Mortgage Lending Group for more information about an Orange County, CA home loan. 877-786-4243 x 7.
Contact us for your Orange County FHA Mortgage:
Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.
877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com
*Licensed by Department of Corporations under the California Residential Mortgage Lending Act. PRMI Branch License 813F487.
