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FHA to bring back 'spot approvals' for condos

Good news for condo buyers. FHA (Federal Housing Administration) is looking to bring back spot approvals for condo buildings. What does this mean for buyers? You don't need to be concerned as much whether the building is on the FHA approved condo list for financing.

Quick quiz: there are over 250 condo listings in Arlington. Can you tell which ones are approved for FHA financing? (Hint: the answer is not yes).

The main attraction for a buyer to use an FHA loan is the low down payment requirement (3.5%). Currently, a condo building has to be the approved list before a buyer is able to obtain. And to get on the approval list, the condo association has fill out a lengthy application and pay a fee. 

The new proposal is to bring back 'spot' approvals. In this scenario, if a building isn't on the approved list, a buyer (with the help of a lender) can request an approval from the FHA directly. It still takes some time for the approval, but now the buyer has some more control over the situation and it is not a lost cause if the building isn't on the approved list.

To read more details on the announcement, read Ken Harney's article here.