Happy New Year! Best wishes to your loved ones and you.
FHA “Spot” Condo Approval
The Federal Housing Administration (FHA) has made a major change in policy that will allow a single unit condominium approval, instead of the entire condominium complex going through for fha approval. While the approval standards remain similar, this will make it much easier since previously it was a time consuming and lengthy process. Approvals were only good for 2 years and associations had to re-apply when an approval expired.
This is very significant since it add as many as 60,000 units that can be financed by FHA insured Mortgages. While there are 150,000 Condominiums in the USA, less the 7% are currently FHA approved.
This is great news for First Time Home Buyers. 84% of borrowers that purchase using an FHA insured mortgage are first time home buyers. Condominiums are also popular among Senior Citizens and Millennials. This will undoubtedly have a positive impact on Real Estate and is long overdue.
“Condominiums have increasingly become a source of affordable, sustainable homeownership for many families and it’s critical that FHA be there to help them,” said U.S. Housing and Urban Development Secretary Ben Carson. “Today, we take an important step to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age-in-place.”
HUD Acting Deputy Secretary and FHA Commissioner Brian Montgomery added, “Today we are making certain FHA responds to what the market is telling us. This new rule allows FHA to meet its core mission to support eligible borrowers who are ready for homeownership and are most likely to enter the market with the purchase of a condominium.”
It will be interesting to see what impact this will have on loans guaranteed by US Department of Agriculture (USDA). The USDA has income restricted 100% financing without PMI. Much of NJ, PA and Florida have very large areas that are designated rural by USDA. In the past, their policy was the same as FHA and they followed FHA guidelines for Condo approvals.
Our rates are exactly the same as we stated in our last 2 Newsletters.
30 Year Fixed Rate: 3.375%
FHA 30 Year Fixed: 2.75%
15 Year Fixed Rate: 2.875%
7 Year ARM: 3.25%
10 Year ARM: 3.375%
NJ State Real Estate Trends:
In 3 weeks or so, the New Jersey Association of Realtors will release year end reports for 2019. So in our February newsletter, we will have detailed year end numbers for you. Since we discussed FHA new condo policy, lets take a look at some stats for the Condo market segment in the State of NJ.
YTD 2018 YTD 2019 % Change
New Listings: 34,166 34,566 +1.2%
Closed Sales: 21,521 21,344 -.8%
Median Sales Price: $265,000 $275,000 +3.8%
Avg Sales Price: $342,521 $347,445 +1.4%
Days on Market 62 62 0.0%
These numbers are through the end of November and extremely well balanced. Good for both buyers and sellers. Nothing better then a “Win-Win”.
NMLS ID 66034
2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Licensed Lender: Licensed by NJ Department of Banking and Insurance
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