You may remember that one of my last updates was about FHA and the new condo project approval process. Well here is a little bit of good news. While we still do not know how this new process will be implemented, we now know that it won’t be implemented until December 7th, 2009. This means that if you are a condo buyer, you have an extra 5 weeks to get under contract and get an FHA case number assigned. If you can get an FHA case number assigned before December 7th you don’t have to worry about having the condo project “re-approved” assuming that the project is currently approved.

Also, It has come to my attention that some Realtors and Buyers are not sure about the process of buying a HUD home. If the buyer is using FHA financing and they over bid on the property, the FHA loan has to be calculated using the HUD offering price, not the actual bid price. So, for example if the HUD property is listed at $100,000 on the bidding web site but you know that you have to overbid by, for example, $10,000 to win the bid, the buyer will have to bring that extra $10,000 to closing because the FHA loan has to be based on the $100,000 listing price. Not the $110,000 bid price. Since FHA and HUD assign a new FHA case number on the original appraisal, you can’t go get a new FHA appraisal. I have had a few situations lately where the buyer wants to use the HUD $100 down program and they think that it is $100 off of the bid price only to find out that it has to be based on the offer price and they had to back out because they did not have the extra cash to make up the difference.

I hope this helps. Let me know if I can help with anything or if you have any questions.

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