Who Has 20% to Put Down?
Very few first time buyers are able to come up with the $60,000 + needed for a typical downpayment on a Hoboken condo. FHA Spot Approvals are no longer an option. So what is a seller to do? Simple – get your building FHA approved!
Getting a building FHA approved is a simple process with as fast as a 7 day turnaround time, depending on the bank.
Here are the typical questions the bank will ask. Of course, there is more detail in the actual application:
- Is the Flood Insurance Coverage equal to the Building Coverage?
- Are at least 50% of the units owner occupied?
- If there is commercial space in the building does the square footage take up over 25% of the building’s total square footage?
- Does the budget have a line item to collect maintenance reserves (10% of the budget minimum)?
- Is the association a plaintiff in any litigation?
- Does any single entity own more than 10% of the units?
- For projects with under 20 units does any single entity own more than 1 unit?
If the answers are acceptable, this building is likely to be eligible to get FHA approval. You can now sell your condo to buyers who have as little as 3.5% to put down. That opens up a whole new universe of potential buyers. If I were a seller I would RUN to my condo board to get this done. The cost is minimal and the benefits great.