If you have been to Downtown Raleigh in the past 12 months, you might be surprised how many Condos have sprung up! It’s one of the most interesting and explosive markets in this area – and it’s not just a “condo” market isolated to Downtown Raleigh! Condominium projects are part of virtually all large planned development areas now, including projects in Apex, Cary, Midtown and North Raleigh.
These projects are also very popular in Charlotte, Wilmington, Chapel Hill, Greensboro and Asheville. One of the interesting financing “rules” to remember with Condos is that “Second Homes” are difficult to finance outside of a “resort” area. So, if you are purchasing a condo in Charlotte, for instance, because you have family there – or you want to purchase a condo in Chapel Hill, because you have children going to school there – or you like to come back for sporting events – you might be treated like an INVESTOR and be required to make a larger down payment!
Getting a Mortgage on a Condo can be difficult – especially if the ratio of “renters” to “owners” in the building you really love is particularly high, or the project was recently in bankruptcy, and the Homeowners Association is not re-established.
Sometimes a VA Loan or a FHA Loan are the best options for purchasing a Condominium in NC. FHA requires Condominium Projects be approved by FHA. In days gone by, we could approve a project, or do a “spot” approval for just one or two units in a building. That’s no longer an option.
In Raleigh, FHA currently has 71 Projects that have been approved (as of today). Unfortunately, more than HALF of those projects no longer have “current” FHA documents. That means that we would need to gather all of the Homeowner Association Documents, and resubmit them to FHA if you wanted to buy a Condo in one of those units. It can be done – it’s just going to take a little bit longer to get through the process.
Remember while you are looking at Condos that you will have higher “monthly” fees, and again, sometimes those fees (tied to the amenities in the building) make financing a unit the size you’re interested in more difficult… on the PLUS side – the Condo fees generally cover the Building and Maintenance – so you only have to worry about maintaining the Carpet (for instance) in your unit (you usually don’t have to be responsible for the roof, or hallways or grounds).
There are many rules and guidelines for condominium approvals since these properties have multiple owners, some of which are investors, and are maintained and governed by a homeowner’s association.
During the housing boom, condominium sales skyrocketed as more consumers were downsizing or looking for second homes. At that time, getting a mortgage for a condo was not that difficult. In fact, the rules were made easier with spot approvals and condo questionnaires. Mortgages for condominiums became very popular with Fannie Mae, Freddie Mac and FHA (Federal Housing Administration).
When the housing crisis occurred, no one wanted to touch a condo because values had plummeted. Many owners were leaving them behind which left associations behind in maintenance and association fees. The rules for associations tightened even further during that time which made it impossible for current owners to refinance.
Want to Know More About FHA Approved Condo Projects in NC?
Looking for a Condominium in Raleigh and want to know about First Time Home Buyer Programs that might be available (including $8000 for your downpayment?!) Call Steve and Eleanor Thorne 919 649 5058 we are NC’s Mortgage Experts and we’d love to help you find today’s best rates and get the place that’s just right for YOU (not the cookie cutter culd de sac!)
Remember that if you use FHA, your family can help you qualify for the mortgage as Non Owner Occupying Co-Borrowers!