When the federal government stepped into the real estate market, during the Great Depression, the goal was to turn the real estate economy around in the hopes that the rest of the economy would follow. This quickly proved to be a successful venture, one that would continue to gain momentum over the following decades. Today the federal programs put into place are still going strong, and are a major driving force on the entire housing market, including the buying and selling of condominiums. FHA approved condos are a hot commodity on the market, both for the buyer and the seller, and shouldn’t be dismissed when you’re in the market for a new home.
Why Own an FHA Approved Condo?
When looking at the purchase of a condo, the inevitable question is this: Why would a person consider the federal program over a traditional lender? There are multiple reasons, but a good place to start is with the end game in mind. How long does one intend to live in the condo? If the intent is to sell eventually and move to a different location, then it’s smart to consider all of your options, including those the government has to offer. FHA approved condos have their own little stamp of approval for buyers simply because the requirements to purchase through this program are typically more forgiving than those of traditional lenders. This means that a higher percentage of buyers will be looking for federally approved properties over those that haven’t been approved. A condo that is not a part of this approved pool may have a limited number of potential buyers.
Aside from the fact that the number of buyers may be increased, the loan that is acquired through the federal programs typically has quite a bit more leeway than other loans. The immediate benefit of the loan is the decreased down payment and reduced closing costs. When you’re working with limited funds, this can be a huge benefit. Another perk is that these loans can be assumed by another buyer. Assumable loans are like a bright shining star in the housing market because a new owner can just take over the loan. The interest rate doesn’t change and the loan amount doesn’t change. Since it isn’t uncommon for interest rates to go up after the purchase of a home, being able to take control of a loan with a lower interest rate is very appealing to a potential buyer. Other benefits to the homeowner include the resale value. FHA guidelines require that the property be well taken care of to maintain the resale value. And since the entire complex will be kept to the same guidelines, you can typically trust that the resale value will fluctuate with the market rather than be reduced because of poor maintenance.
Finding Your New Condo
When looking for an FHA approved condo there are quite a few different resources available to a potential buyer. A qualified real estate agent will be able to do a condo lookup and locate those condos that have gotten through the approval process. He will also know what the pros and cons of the complex are. Usually a good real estate agent will be able to tell a bit about the city that the condo is located in as well.
A real estate agent is a great resource to have at your side, but you can perform your own condo lookup online. The federal government has a website set up where potential homeowners can do a search to find the properties which have gone through the approval process.* If this isn’t the resource you’re looking for, a simple Google search will pull up multiple websites that give one the option to search for federally approved condos.
When all is said and done, the method you choose to purchase a condo isn’t the top priority. The actual purchase is. But having the process be just a little bit easier – and getting more benefits after the ink has dried on the loan – are motivating factors that should be taken into consideration. Having the purchase insured by the federal government gives the buyer credibility, and opens up more options that otherwise may not have been available. Just remember to keep your options open and to consider all opportunities that happen to come your way before you sign the contract. In the end you’ll be glad you did.