If you’re looking to purchase a condo and you’re in need of an FHA mortgage loan, there are a couple of steps to take that will ultimately save yourself some time, aggravation and disappointment. First and foremost, you should get your pre-approval certificate before you start condo shopping. Next, be sure to only look at condo complexes that are FHA approved. These two simple undertakings will be worth their weight in gold.
A pre-approval certificate is a lender’s commitment to lend. Once a condo is found, the pre-approval certificate is as good as having the funds in your hand, thus letting the seller know you are a viable buyer. In addition, the pre-approval certificate will considerably improve your leverage when negotiating a sales price with the seller, and it will also allow you to close almost immediately after entering into a contract with the seller. Don’t be confused with a pre-qualification letter, as it is a step below a pre-approval certificate. A pre-qualification letter merely specifies the size of a monthly mortgage payment a borrower can manage to pay and is not a commitment to lend.
The Federal Housing Administration (FHA) requires condo projects to be approved by both FHA and the U.S. Department of Housing and Urban Development (HUD). FHA and HUD do not allow any exceptions to this rule, so it is recommended that you click here for HUD’s online tool for locating FHA approved condos in your area of interest. Who knows, maybe you’ll find an FHA condo project you never knew existed.
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