FHA Approval – what Orange County First Time Buyers need to know
Hi all,
I was just meeting with one of our first time buyer preferred lenders, Manny Piceno. Manny plays hockey with Mike at Aliso Ice rink, and he’s always been one of our favorite g0-to guys because he’s full of good info but not full of himself 🙂
If you’re not actively looking for a home right now, you may not know that the most common first time buyer loan, FHA, has stricter guidelines than other loan packages. FHA is a great 1st time buyer loan to get because its fixed rate, backed by the government, AND you only need 3.5% down.
BUT, there are additional guidelines for FHA loans. One of those guidelines is that the HOA doesn’t have too many homeowners defaulting on their HOA payments. When people get in financial trouble, one of the first bills they stop paying is the local HOA. Also, the HOA needs to have a certain percentage of owner occupied properties. If too many investors own and are renting out properties in that neighborhood, it may not be FHA approved.
FHA approved neighborhoods in Orange County – how the heck do you find them?
Well, Manny let us know about this website:
https://entp.hud.gov/idapp/html/condlook.cfm
Of course, its not perfect and the status of neighborhoods is constantly changing, but at least you can have a resource to get an idea.
What about spot FHA approval for Orange County condos?
Well, its possible, but highly UNlikely if your neighborhood is listed on this website as ‘withdrawn’ or ‘rejected’. If you’re a first time buyer doing an FHA loan, you just cannot buy a property in that neighborhood. We’re sorry, you may complain to the government 😉 Or, you can borrow $$ so you have a 20% down loan, and buy wherever the heck you want. Really, although it can be frustrating to be limited when buying your first property, FHA is truely looking out for you and your best interest.
If you DID buy a property in a neighborhood where the HOA is belly up, the exterior could go south quickly and then it would be hard to sell. Don’t believe us? Call and ask Angie about how she had to be an expert witness in a court case where the HOA went bankrupt and the complex is now INFESTED with termites. A poor unsuspecting homeowner cannot sell her condo, and she had a shady Realtor represent her in the buy. She is still living with lots of winged roommates, and this has literally been going on for YEARS. If FHA loans would have been available in CA at the time she bought, they would have prevented all the drama for her. So sometimes, being told no is a good thing people! 🙂
Please call us if you have any questions about getting an FHA pre-approval. You CAN own a home, we can help! 877-230-3211
Orange County Real Estate Success 
[…] Last year’s rental rates in the OC went up by about 5%, and Gary believes we’ll continue to see that trend. Last year, 30% of home sales were purchased by investors. Because they now cash flow, investors are picking up a lot of properties in Orange County. This creates some challenges for new buyers, particularly ones who are looking for condos with FHA financing. […]
Orange County Real Estate update – Gary Watts speaks to YPN « Orange County Real Estate Success
January 23, 2012