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Our Condo HOA is not FHA loan approved... Any Suggestions?

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  • Our Condo HOA is not FHA loan approved... Any Suggestions?

    More specifically it was rejected in 4/2020 (reasons not specified on HUD website but we have an email out to our HOA). Therefore, I do not think we can apply for "spot approval."

    We just bought a SFH and we are in a hot market so we thought it would sell rather quickly. Despite a lot of interest in the place, no offers have been made because the FHA thing is a deal breaker for the 7 inquires. We have asked our realtor to suggest the HomeReady mortgage program through FannieMae (source: https://singlefamily.fanniemae.com/o...ready-mortgage ), but still no offers. At this point, we just have to hope someone with a conventional loan comes along and we likely will sell significantly below what we anticipated.

    The thing that is even more frustrating is that our community, which is largely similar condos, is broken up into 3 HOAs, 2 of which are approved for FHA. Just salt in the wound at this point

    Our condo is in a low-income area. With our first child on the way, my husband and I are not interested in becoming landlords. The HUD rejected this, so I do not think there is any recourse at this point.

    Does anyone have any suggestions on any potential solutions to help sell this place? We were making a lot of plans with the assumption that this place would sell. Now we are a bit worried.

  • #2
    Just out of curiosity, why is it not FHA approved? Also, is it just overpriced?

    We lived in an upscale 30 story condo building (renting) for the past 10 years, until buying a SFH at the end of winter. I loved the building and thought about buying, but I hesitated, looking at the price history in the building. Basically the building is about 15 years old. Had you bought early, 15 years ago, you would be selling at a substantial loss now. Noting this, in addition to $1,000 per month condo fees for the owner, I don’t envy the owners in that building. SFHs have sky-rocketed in price over this time.

    The condo prices have oscillated over these years, with a downward trend. Now at 15 years out, the units, which where all decked out in in brownIsh travertine, marble, and granite everything are considered dated and less desirable in the new, white and grey world. Basically all of that stone has to be jackhammered out and updated.

    We left at the start of the pandemic, and the rules in the building about visitors, workers, deliveries, pool and gym use, and elevator use went crazy due to Covid fears. Residents and management were panicked, and it became an unpleasant place to be locked up.

    In addition, later, protest-mobs attacked the entertainment and financial district and you could watch mobs with battering rams smashing in the doors of the banks and lighting cars on fire below. Videos from friends there showed it was like watching a mid-evil siege, from your balcony. Scary stuff. (Press coverage vs looking out your window was very strange indeed).

    This summer, the SFH housing market has taken off unexpectedly here, while the condo market has crashed. People want out of those condos ASAP. The place I was in still hasn’t rented or sold. Cheaply priced units are just sitting there.

    I’d say, consider painting everything white, and make sure your online pics are excellent and clear, and review your pricing.

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    • #3
      Originally posted by Jaqen Haghar MD View Post
      Just out of curiosity, why is it not FHA approved? Also, is it just overpriced?
      The HOA has not yet returned our email inquiry. My guess would be too many renters or too many delinquent HOA payments.

      In terms of overpriced, I would say having 14 showings and 7 inquires in the first week (which they eventually did not make an offer given the FHA situation) suggests to me that we had it priced right. However, now that our potential buyer pool is probably 10% of what we initially thought, it is likely now overpriced. We are dropping the price $5k every Thursday.

      We are not in the city so there is no civil unrest. Just a working class town that is just outside of the city.

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      • #4
        Originally posted by Pharmacist Amanda View Post

        The HOA has not yet returned our email inquiry. My guess would be too many renters or too many delinquent HOA payments.

        In terms of overpriced, I would say having 14 showings and 7 inquires in the first week (which they eventually did not make an offer given the FHA situation) suggests to me that we had it priced right. However, now that our potential buyer pool is probably 10% of what we initially thought, it is likely now overpriced. We are dropping the price $5k every Thursday.

        We are not in the city so there is no civil unrest. Just a working class town that is just outside of the city.
        I would guess too many renters. Are there other units for sale/sold that you can easily compare to? Do you have any other advantages/disadvantages to them? (Lake view vs parking lot view? Interior upgrades vs dated? Higher vs lower floor?



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        • #5
          Originally posted by Jaqen Haghar MD View Post
          In addition, later, protest-mobs attacked the entertainment and financial district and you could watch mobs with battering rams smashing in the doors of the banks and lighting cars on fire below. Videos from friends there showed it was like watching a mid-evil siege, from your balcony. Scary stuff. (Press coverage vs looking out your window was very strange indeed).
          So, mostly peaceful protests with folks maintaining 6+ feet of separation and all wearing their N95s?

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          • #6
            Originally posted by Jaqen Haghar MD View Post

            I would guess too many renters. Are there other units for sale/sold that you can easily compare to? Do you have any other advantages/disadvantages to them? (Lake view vs parking lot view? Interior upgrades vs dated? Higher vs lower floor?


            HOA confirmed too many delinquent HOA payments proportionally.

            In terms of our advantage to comps, we have a 3rd bedroom and more sqft. Our kitchen is updated and we have wood floors. We are pricing the same as the 2bd2bath listed in the community.

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            • #7
              Originally posted by Pharmacist Amanda View Post

              HOA confirmed too many delinquent HOA payments proportionally.

              In terms of our advantage to comps, we have a 3rd bedroom and more sqft. Our kitchen is updated and we have wood floors. We are pricing the same as the 2bd2bath listed in the community.
              I live in a homeowners association, I’m a owner, it frustrates me that the homeowners association does not do anything about past collections that is aggressive. In the last six years I’ve seen this basically be brushed under the rug. I don’t know anything about Managment so maybe there’s not much they can do? What is your homeowners association doing? What was the reply when you pointed this question at them?


              edit : as the owner it’s really annoying because it brings down everybody’s value including theirs!
              Every owner, including those owning rental unit should be interested in you getting the highest price so that their comps are improved

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