I always preach when it comes to the home buying process, you need to get your loan professional involved early. This becomes even more critical when you usnig FHA financing to buy a townhome or condo in San Mateo County. Why? The complex you chose may not be FHA approved. FHA and HUD have their own list of approved condo complexes for San Mateo County. If your complex is not on the list, your lender has some work to do.
San Mateo County Condo Not on the FHA Approved List?
If your complex does not show on the FHA approved list the lender will have to do a spot approval. The spot approval is not only for your unit alone, but for the entire complex.
Requirements for Complex Approval
Here are the requirements for complex spot approval:
- Condominium complex must consist of 2 or more units.
- No more than 25% of the complex can be used for commercial purposes.
- No more than 10% of the units may be owned by one investor.
- No more than 15% of the total units can be delinquent in their HOA dues.
- At least 50% of the total units must be sold.
- At least 50% must be owner occupied.
- For projects with 3 or less units, no more than 1 unit can be encumbered by FHA financing. Projects of 4 or more units will have no more than 30% of the total units encumbered by FHA Financing.
- The reserve study must be no more than 12 months old and must show the project is at least 60% funded.
Work With a Mortgage Professional Who Understands FHA Condo Requirements
Using an FHA home loan to finance your San Mateo County condominium does have its advantages, but you need to make sure you are working with a San Mateo mortgage professional that understands the FHA condo requirements. If a lender needs to perform a spot approval, it can add an additional 2 to 4 weeks to the loan process. Remember, always get your loan professional involved early.
Financing a Condo in San Mateo County?
If you plan to finance a condominium in San Mateo County at some point in your future, give me a call at (650) 520-0915 or email me at info[@]SanMateoMortgageBlog.com for a free, no obligation consultation. We’ll take a look at your financial situation and help you determine which loan program is right for you.
Other Posts You May Enjoy
- 9 Questions to Ask When Financing a Condo with FHA
- The Process for Getting a Home Loan
- How to Accept a Down Payment Gift from Family
- Why It is Imperative to Get a Pre-Approval Before Submitting an Offer
- What Is and What Is NOT a Pre-Approval
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