Salt Lake City condos harder to finance due to elimnation of spot approvals on FHA loans

FHA loans have been the recent choice for low down payment residential buyers offering loan programs that require just 3.5% down.  Recently FHA decided that they will only lend on condos that are on the FHA approved condo list.  FHA use to allow for spot approvals if a condo was not on the list and this policy changed in February 2010.

So now buyers of condos not on the FHA approved list will need to go with a conventional loan and unfortunately that means a bigger down payment and higher credit requirements.  I’ve checked with lenders I frequently work with and 10% down is a possibility if you have really good credit, but it’s not easy to find and many lender require 20% down for a Conventional condo loan.

This will decrease the number of buyers for condos in projects that are not FHA approved which will most likely effect values in these condo projects.  FHA approved condos may end up actually benefiting from this and there may be more demand for inexpensive single family homes too, but that’s yet to be seen.

The Salt Lake City real estate market is constantly changing.  If you need help with the purchase of a Salt Lake City home, condo or duplex, contact me.  I’ve been a local Realtor for 10 plus years and over the last year, 80% of my client have been buyers.