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 The Denver Post reported that a majority of condominium
complexes in the Denver metro area have lost eligibility for Federal Housing
Administration financing.
This means that future buyers will not be able to get FHA
loans, limiting the types of loans that they
can use to purchase certain condos, thus limiting the number of buyers who
could be eligible.
"We will see a lot of people who will discover that their homes are
basically unsalable," said Norm Lewis, a loan originator at Peoples
Mortgage in Lakewood. "It is a downward spiral that could easily be
arrested."
The
US Department of Housing and Urban Development (HUD) requires that completed
condo projects apply for approvals every two years and without that approval; there will be no FHA loans
available. The new rules, applying only to condos- not townhomes, were meant to
protect FHA after the housing crisis.
Only
one third of condo developments in metro Denver were current, according to the Denver Post, and two out of three had
expired or rejected approvals on the HUD website.
"To win approval, no more than 15 percent of units in a development
can be delinquent 30 days or more on their association fees." reports the
Denver Post. "Additionally, half or more of the units in a development must be
owner-occupied. And a condo association can't be in litigation.
Experts aren't sure why the
associations are ignoring the renewal process. "Not everybody has realized the impact
it can have on their community in terms of resales." said Terry Jarrett, president of the
Rocky Mountain chapter of the Community Associations Institute. "They are used
to doing it once and not thinking about it,"
Read the full story at The Denver Post.
 photo credit: sameold2010
Posted on January 23, 2012 10:54:26 by  Scott.Shields
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