If you are purchasing a Condominium in NC, and you are interested in getting a FHA Mortgage to help with that purchase, you need to check and see that the Homeowner Association (HOA) is already on the approved list by FHA. Townhouses also share similar risks as Condominiums, however FHA no longer requires documentation on Townhouse Homeowner Associations.
If you are purchasing a condo in NC it’s important to look at the approved list, even if you are going to apply for a VA and USDA home loans too – because most underwriters will look at the FHA Mortgage list when approving these loans too. What’s the big deal about living in a FHA Approved HOA project? It should help you with re-selling your home, and it will likely mean the difference between getting a FHA loan… or not.
What does FHA look for when approving a Condominium Project in NC?
For the most part, there’s a questionnaire that has to be completed, and updated. This FHA Condo questionnaire is sent to the Administration Group for the Homeowner’s Association, and it covers how many units are non-owner occupied, what the reserves are for the Association, and what the Insurance Policy covers.
It’s important to remember that Homeowner Association fees are not items that are paid from an escrow account for FHA insured mortgages. FHA considers payment of HOA fees the sole responsibility of the borrower. For a Townhouse, where you have common walls with other homeowners, and Condominiums, where you have common ownership of walls, stairways, etc… these fees are generally used for a common insurance policy and maintenance.
A new roof for the building, landscaping of common areas and administration fees for the Homeowner Association are usually included in the fees. Fees in NC for Townhouse Units can run anywhere from $125 to more than $400 for Condominiums that are on the beach, or have assessments against them.
Sometimes, those monthly dues will keep a borrower from qualifying – it’s EXTREMELY important to let your loan officer know exactly what the dues are. Makes sense, right? $275 a month Homeowner Association (HOA) dues could be another car payment!
For Condo and Townhouse owners being foreclosed upon, the HOA has a legal right to attempt collection of unpaid fees. They may bring legal action or refer the matter to a collection agency. For buyers of foreclosed Condos or foreclosed Townhomes, the issue of unpaid HOA fees is settled prior to purchase. We strongly recommend that Buyers investigate the financial state of the HOA before buying a Condo or Townhouse in NC.
Most communities that were given the FHA Condo Approval Certification had it revoked sometime in the last 2 years. If the project you are interested in is currently approved, but shows an expiration date within 6 months, the HOA needs to submit additional documentation to avoid a lapse in FHA Condo Approval. Click the button below to see if the project you are interested in is on the FHA Mortgage Approved Condominium List
Have questions about a FHA Mortgage and cash needed to close and closing costs, or how the $3% down payment assistance program from the State of NC works? You CAN use these programs to purchase a Condo in NC!
Call Steve and Eleanor Thorne about your particular situation at 919 649 5058. Remember – you might qualify for a Single Parent Grant to purchase a home in NC! Connect with us on Facebook or Google + we’d love to help you make your dreams of buying a home in Raleigh come true!