Condo Market..Why is nothing Selling?
Why is nothing Selling? The market is over saturated? Sellers are frustrated and wondering why their condos are not selling. A huge part of this reason is due to Buyer not being able to obtain FHA financing on Condos. The requirements to be able to qualify for this lower interest rate and less down option has restricted people to looking at homes that are still in their price range and can also obtain this more appealing financing. There are several requirements that have been put in place that make Lenders not the end all to approval for this financing but also HUD the word for the final approval. it has even lenders unsure if condo units are FHA approved.
A couple things to consider:
1. The units must have 50% occupancy (more like tipping the scales at 51%) (much of the reason why you see all the new builds reduced so much to get buyers in)
The issue with this is they do not count rentals or REOS (real estate owned, Bank owned in this)
2. The owners can not own more than 10% of the units
3. HOA has also been a factor in this and complicate things when they are delinquent. There have been so many new builds that have gone up and planned during the housing boom but no buyers so they become delinquent when they can’t sell
Below are some links so you can see the details of this according to HUD and compare your own situation:
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-46aml.pdf
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-46bml.pdf