Towson Condo Owners have a new issue to grapple with.
HUD announced this change in July, and the new guidelines were to take place October 1, but on September 15 they extended it per this note on their website: “This new approval process was effective for all case numbers assigned on or after October 1, 2009. However, the new effective date is for case numbers assigned on or after November 2, 2009“. This allows more time for buildings and mortgagees to be prepared for these changes. Here is the mortgagee letter from HUD, under “Notice on FHA Condomimium Processing” explaining the changes.
The biggest issue is that EVERY condo development in the United States will have to go through this process to be re-qualified to have FHA loans allowed in their building. Imagine the hold up/back up this is likely to create.
A major change in the guidelines that could ALSO create a delay is the elimination of the “Spot Loan Approval” process. HUD states the reason for this is that “DELRAP and HRAP processes have been streamlined to allow for uncomplicated condominium project approvals eliminating the need to approve units on a “spot loan” basis.”
Unfortunately, this new process could add a decent amount of time to approving a condo project because much more paperwork has to be submitted to the bank, reviewed, and then submitted onto HUD.
Add onto that the many people wanting to take advantage of the $8,000 First Time Homebuyer Tax Credit that is set to expire at the end of November, and you have a recipe for a huge disaster looming in the near future!
SO, if you have been considering buying a condo in Towson or selling one, the time to do so is NOW. Luckily with this extension, we have a little more time to GET IT SOLD!