FHA Out of Condo Financing Loans?

It's not boa. It's Bernie. You're pissed at the wrong guy. furthermore, you're pissed they took the rope away to hang yourself. Flmao. Let me also guess, on top of the yanking of cheap money, it's gonna 'cost' you the first lemming tax credit.

Let me espanglish something for you. Fed has been telegraphing the withdrawal of fed money in the mortgage mkt for months. Furthermore Obama will re-jigger Fannie/Freddie early 2011 (w volcker in his ear), plus bonus in 2011 will be shit compared to 2010. Now looks to me you just 'lucked' out. If you can't buy with a 'traditional' mortgage and an FHA loan was the only way,,,,,,, things that make you go hmmmmmmmmm.

Freddie just announced they won't buy io loans.

Oh yeah I saw that too. For every about to be lemmingers, that's HUGE news. For about to be stuck underwaterers, that's f'king HUGE news. Good luck with your 2004-2/27/10 purchases. From what I remember that's when io really started getting enormous traction in NYC.

Flmao. It's gonna be sweeeeeeet! 3bdrm on uws just flashing herself at any 'looker'. It's gonna be re porn like no other in a year.

I have been talking to a broker about a traditional loan, also, but it looks like it's Fannie Mae backed.
Should I guess that come next week, that shoe too is going to drop?

Well, looks like my down payment is going to be in the market for a year or two, then.

What's io?

I've got it. Interest Only.

I was interested in a 30-year fixed, for the record.

Kafka. Alrighty. U really want this place? Play possum, go back to seller and say this is all I can afford. There is a $ value to losing FHA loan. Me thinks seller will eat all that for you. Fwiw it's a buyer's mkt. All and every cost that can be pushed to a seller will be, and this includes higher interest rates. Good luck.

77 Hudson just annouced a couple days ago that they got FHA approval. I highly doubt its gone.

information is power... here are the new regs...perhaps the credit score is the issue kafka?

http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-016

and wow w67..... "All and every cost that can be pushed to a seller will be, and this includes higher interest rates. Good luck."...must have had a good time walking the dogs,lemmings and other animals tonight? wishing someone good luck? FLMAO

FHA approval needs to go. 3.5% down is just keeping these prices higher than they should be.
Taking out a loan for 96.5% just doesn't make any sense in todays market.

Once the home buyer credit is gone and the prices drop,interest rates increase most of the FHA 3.5%ers will start walking away from their mortgages.

RE Crash part two coming soon

Moxie, my credit score low is 740's, my high is 776, my mid is 772. My income is 6 figures.
I wanted to make a small down payment, so I could use my money for other investments, but this was at the stage of discussions. I can actually put down 10% on properties in the $500k's... they knew that. It's not like anyone came back and said 'you need a higher down payment," etc. I could have remedied any of those.

It's really weird and I'm dead curious as to what's going on.
Is BoA getting burnt with so many defaults that they rather not lend for a while?
They just need to say it!

And your link fails, moxie.

kafka,
when you call them monday simply say" i have read the new guidelines and i'm not sure how they impact my situation." Let them explain or hang themselves..

try the link again works for me???

FHA Announces Policy Changes to Address Risk and Strengthen Finances
New Measures Will Help FHA Better Manage Risk, While Maintaining Support for the Housing Market and Access for Underserved Communities
WASHINGTON – Federal Housing Administration (FHA) Commissioner David Stevens today announced a set of policy changes to strengthen the FHA’s capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities. The changes announced today are the latest in a series of changes Stevens has enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.
The FHA will propose to take the following steps: increase the mortgage insurance premium (MIP); update the combination of FICO scores and down payments for new borrowers; reduce seller concessions to three percent, from six percent; and implement a series of significant measures aimed at increasing lender enforcement. U.S. Housing and Urban Development Secretary Shaun Donovan previewed the changes in December of last year, noting that the FHA would announce additional details before the end of January.
“Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important,” said Commissioner Stevens. “When combined with the risk management measures announced in September of last year, these changes are among the most significant steps to address risk in the agency’s history. Additionally, by continuing to provide affordable, responsible mortgage products, FHA will support the housing market’s recovery. Importantly, FHA will remain the largest source of home purchase financing for underserved communities.”
Announced FHA Policy Changes:

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
* The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
* If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
* This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
* The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.

2. Update the combination of FICO scores and down payments for new borrowers.
* New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
* This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
* This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.

3. Reduce allowable seller concessions from 6% to 3%
* The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
* This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

4. Increase enforcement on FHA lenders
* Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.
o This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
* Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
o Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
o This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
* Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
o Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
* HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
o Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
o Legislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches

In addition to the changes proposed today, the FHA is continuing to review its overall response to housing market conditions, and continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward.

###

HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.

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This seems extremely odd and unlikely. The new FHA guidelines moxieland posted don't affect the agency's ability/willingness to make condo loans. Kafka -- drop me a line if you want to talk further; I'm a personal-finance journalist (so I'm gathering string on what's happening now with mortgage loans) and I'm currently waiting on BofA to issue a commitment letter on my FHA-backed loan. I'm curious who your mortgage banker is? I've been extremely happy with the one I'm working with at BofA. stacy@covehurst.net

agree kiz...as these are the only "new guidelines" i could find hence my advice was to put the ball back in BOA's court

Kafka: there is a broker/banker? who works at BOA who advises on this board frequently. search for him on this board under shong or here is his email : sunny.hong@bankofamerica.com. Just ask him what is going on. he seems quite knowledgeable in all his posts on SE.

Thanks for all your advice. I'm all for responsible lending, and I just had a quick glance at the Press Release and still don't see it saying that FHA is not doing Condo Lending. As for the percentage down, sure bring it on with 10%, I still can do that. After all, it's the required minimum percentage down in most properties I am looking at.

Trade relationships can be damaged with people like my BoA mortgage rep. saying incorrect stuff like that. I too do have a choice where services my IRA, checking, savings and credit cards are.

Kafka - these mortgage people all have a habit of lying directly or engaging in sins of omission. Their motivation is to get you a mortgage that will allow the deal to go through AND to get themselves the largest commission possible. And that's all that there is to it. Don't you ever forget that, and make sure that you work with at least 2 banks so that you can play them off against one another.

Kafka: there's simply nothing to the recently released FHA changes that precludes condo financing. FHA is absolutely still lending on condos as we speak. Sounds to me like you're getting an uniformed answer as to why BofA can't do your loan. Getting a commitment letter with FHA building approval, 10% down payment, and a decent credit score should be quite easy.

kafka - I hate to say that whatever infomation you received about FHA not doing condo lending is false. If the condo is FHA approved then you will find it on the HUD website and we will do FHA loans there (as long as they didnt hit the maximum concentration limit). Whether you actually qualify for the loan, I acnt say since I dont know your profile. I think there must be some miscommunication or youre dealing with a rookie loan officer. sunny.hong@bankofamerica.com

kafka, the broker may be right, but just didn't phrase the answer properly, Even if the Condo is FHA approved, and BofA may not have done a single loan in that condo building. FHA is restricted to no more then 50% of units can be FHA loans. for example: condo building with 30 units (FHA cap is no more then 15 units can have FHA loans (regardless which lenders did the loans). The building you are in might have met that guideline. and now is no longer eligible for FHA loans.

I have a second bank for a conventional loan with 10% down and I am still working with them, but will follow up with the BoA contact here about the FHA loan. dledven, I never discussed with them a specific building so it never came to 50% units sold, etc. The guy just gave a 360 answer in the middle of an OK conversation about just being told that no more loans.

As I originally said, I'm furious at this person for providing misinformation, and if I can't count on BoA have somebody deal with me ethically on a loan, why should I expect them to behave ethically with any of my other assets with them?