Condos or condominiums are a variety of home ownership, where individual units associated to large housing complexes are sold; rather than leased out on rent. The owner is entitled to acquire rights of specified portion of the real estate.
Control and access to various common facilities like elevators, hallways etc., are excluded from legal rights of individual ownership. Specific associations of related condominiums hold rights to own and maintain common facilities of the estate. It is always better to check for HUD Approved Condos, since they are built and even maintained under strict legal rules.
Contracts of such condos are also specifically demarked. The owners do not face any problem afterwards, since all the rules and regulations are notified in details. This limits the responsibility of the owners to maintain and own the space of particular condo units.
Recent changes in legal provisions have made it necessary to get FHA (Federal Housing Administration) and HUD approval for condominium community. There are a number of facts associated with approval of new condominiums. Few of them are discussed here.
Factors related to Condominium approval by HUD
An approved condominium is certainly focused on two factors –
• They are lenders’ favorite
• The owner is entitle to FHA loan
On the other hand, luxury and super quality high-end condominiums with exclusive facilities are excluded from mandatory approval from Federal Housing Administration, since it serves people of various demographic genres.
Condominiums have become a fascinating choice of lenders since they have opened up feasible avenues to attract buyers who are looking to buy their first home and are unable to access conventional loans.
The program of FHA helps buyers to put a minor share of 3.5% as price down process. This in turn helps to open the road for innumerable new buyers who are unable to cope up with heavy down payments that conventional loan system follows even today.
HUD approval would let buyers from all genres apply for ownership; otherwise, you need to depend on the affluent and privileged class of people only.
An increased demand would eventually lead to the thrust to offer better service and even increase the standard and quality. This would cast a direct impact on the value of the condos and increase their overall market value. The economic factor would play a major role in developing favorable market for a flourishing condo market over national economy.
In addition to all these, a qualified applicant is also entitled to receive almost 6% of closing costs. As a result, the amount of down payment reduces drastically.
Recent legal changes related to legal provisions of HUD Approved Condos
Recently, a number of changes had been incorporated in the program and rules of HUD for allowing condominium approval. They are as follows –
• Mandating re-certification of all projects approved before October 2009
• Eliminating the procedure of spot approval
• Mandatory re-certifying after every 2 years
Approving re-certification for condos dating before 2009 would become a major problem. The workload for the approving body would certainly increase, making many condominium communities wait longer to get their re-certification approved.
Spot approval of condos assisted buyers to get their loan sanctioned easily after getting an effective on-spot checking. Required amount of loan was possible to sanction by associated officials on the spot itself.
Recertification after every two years would naturally create more pressure on certifying authority, who would have to re-certify old condominiums apart from approving the new ones.
Under recent rules, the association of a condominium has to disclose collateral assignments of rights in case it borrows funds for any purpose under legal condominium documents. This would certainly jeopardize earlier condominium projects that do not declare its right to disclose assessments under such conditions.
New laws would also require condominiums, even those constructed or approved before 2009, to maintain specific requirements related to drafting financial records. All necessary records and documents related to the association’s annual turnover have to be disclosed whenever necessary.
Although some changes brought about in the existing rules and regulations related t authorization of condominiums have raised several questions; yet, it is mandatory for majority condominiums to get authorized permit to carry out the service and business side-by-side. No matter what outcomes are achieved, HUD approved condos would surely be the best to adhere with; rather than choosing any other unapproved residential spot at a cheaper rate.