Just received the following info emailed to me from a mortgage loan officer from Bank of America. The information pertains to the guidelines that condominium complexes must meet before BofA will loan on them via FHA financing.
So if you’re in the market for a condo and plan to utilize FHA financing, you’ll need to be aware of the following:
When originating a transaction for someone purchasing an existing condominium with FHA financing it is important that you understand what requirements there are to be able to finance the condominium FHA:
- 90% Presale requirement
- No litigation
- 100% of the project is complete
- No more than 15% of unit owners are delinquent
- Budget shows minimum 10% reserves on the budget form
- Owner Occupancy over 50%
These items will be addressed within the HOA Certification that fulfillment sends and must be verified even if the condo is approved in FHA Connection. As a best practice, make your buyers and realtors aware of the above requirements as well as asking up front if the project is 100% complete and whether it is in litigation. These are questions that your realtor should be able to answer before you even originate the transaction.