| The FHA offers Mortgage Insurance
for Condominium Units under Section 234(c). The FHA does not loan
the borrower money, it insures the loan. This means that should
the borrower be unable to repay the loan, the FHA will refund the
lender. This insurance encourages lenders to approve mortgages that
they might not otherwise. This particular FHA insurance is valuable
to renters whose units are being converted to condos.
The FHA Mortgage Insurance for Condominium Units can cover up
to a 30 year mortgage used to purchase a Condo. In this case the
definition of Condominium is one in which the unit must contain
at least four dwellings. The dwellings can be detached or semidetached,
in a row, a walk-up, or an elevator structure.
Like the traditional
FHA loans, the Condominium Loan can have a down payment as
low as 3%, and some closing costs can be refinanced into the loan,
making home ownership more affordable. However, there are some
requirements that are specific to Section 234(c). If the Unit
is part of a conversion property (one that is converting form
rental property to condos.) several conditions apply. The conversion
must have occurred more than one year prior to the application
for insurance and the potential buyer must have been a tenant
of that rental housing. The loan may be made available also if
the conversion of the property was sponsored by a tenant's organization.
Eighty percent of the Units must be owner occupied.
There may be other requirements/guidelines making a Condo Unit
loan more available to you. Contact a HUD approved lending agency
or a HUD approved housing counselor to find out if you qualify
for Mortgage Insurance for Condominium Units under Section 234(c). |
