Dennis C. Smith, broker and co-owner of Stratis Financial Corp., is warning condominium associations and condo owners that a deadline is almost here for a critical renewal process to be conducted that could have an impact on those with a condo on the market.
“Under FHA guidelines published last November all condominium associations must go through a renewal process every two years,” Smith states in a newsletter to folks in the real estate industry that he regularly e-mails.
Smith, who is an active member of the Long Beach Chamber of Commerce, does a great deal of business and consulting in and around Long Beach. The city, particularly downtown, has numerous condos and condo associations.
On December 7, all condominium associations that received their approvals from FHA before the date of Oct. 1, 2008, must be recertified, or they face the loss of their FHA approval, according to Smith. Once that status has been lost, the association must go through a reapproval process that can take up to six weeks.
This is important for members of condominium associations to take note of, because roughly 30% of all buyers nationwide are using FHA financing, and in places like California, where mortgage insurance has been restricted on condominiums, “having the low down option available for FHA greatly increases the number of potential buyers for a condominium,” notes Smith.
“If you have a listing for a condominium you may want to speak to the homeowners association about obtaining FHA approval, or if they already have the approval ensure that it will be renewed on time,” advises Smith.
Disclosure: Smith is a former Long Beach Post columnist.