Make us your home page
Instagram

Condo owners facing another hurdle with new FHA rules

Selling a condominium in this troubled market hardly needed to get any more difficult.

But that's exactly what could happen to scores of Tampa Bay area condo owners looking to sell or refinance with Federal Housing Administration mortgages.

The FHA — which insures mortgage loans, among other things — has new eligibility rules that condo buildings must follow before any individual unit owners can sell or refinance.

Locally, more than a dozen Tampa Bay condominium complexes had December deadlines to file for the certifications, including St. Petersburg's Palma Del Mar, Sun Ketch and Sky Harbor, and Tampa's Raintree Manor, Place One and Cedar Woods buildings. It will take months for the FHA to process all the paperwork to determine whether the buildings meet the new requirements.

They could become part of the 23,000 projects across the United States, with residential units estimated in the hundreds of thousands, that could also lose the eligibility. A staggered series of deadlines stretches into early this year to gain certifications. The deadlines are based on when the buildings were built.

Florida, along with California, New England and the Midwest, has some of the highest clusters of condos in the country. The FHA wants current information on homeowners associations' budgets, legal documents, insurance coverage, renter-to-owner ratios and delinquencies on condo fee payments.

A review competed in 2009 found that the FHA had approved thousands of projects in the past two decades, but it lacked information to confirm that a building or project was on sound financial footing.

Brian Sullivan, a spokesman for the U.S. Department of Housing and Urban Development, said the recertifications are crucial with so many distressed condominiums.

"This goes to risk in today's marketplace," Sullivan said. "It's important for a place like Florida that is so condo heavy."

Experts say condo sellers nationwide could suddenly be cut off from an increasingly important source of mortgage money; in some markets, the FHA accounts for 75 percent or more of first-time home purchases.

Wells Fargo, the nation's leading FHA lender, is working with scores of condo developers and owners to make sure buildings become certified, said spokesman Tom Goyda. The certifications are important, but he cautioned that it's too early to determine the effect of the approaching deadlines, adding: "It's a complex issue."

But one mortgage broker in Clearwater doesn't think FHA certifications will greatly impact Florida. Many lenders already refuse to loan money on condos, said Scott Chinchar, owner of Scott Mortgage .

"It's already been a problem," he said. "The damage has already been done."

The National Association of Realtors has urged the FHA to loosen some of the certification criteria so first-time buyers aren't driven away from the condo market.

Brian Shuford, the director of governmental affairs for the Pinellas Realtor Organization, said certifications are meant to protect the buyer and government from bad mortgages.

Financing condos nowadays is difficult even without the FHA requirements, said Nick Fraser, owner of Remax All Star in Madeira Beach. Most condo buyers are either paying cash or have down payments between 20 and 30 percent, he added.

"Unless you're putting down a substantial down payment, it's a living nightmare to get financed," Fraser said.

Information from Times wires was used in this report. Mark Puente can be reached at mpuente@sptimes.com or (727) 893-8459.

Condo owners facing another hurdle with new FHA rules 01/13/11 [Last modified: Friday, January 14, 2011 11:40am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Federal agencies demand records from SeaWorld theme park

    Tourism

    ORLANDO — Two federal agencies are reportedly demanding financial records from SeaWorld.

    Killer whales Ikaika and Corky participate in behaviors commonly done in the wild during SeaWorld's Killer Whale educational presentation in this photo from Jan. 9. SeaWorld has been subpoenaed by two federal agencies for comments that executives and the company made in August 2014 about the impact from the "Blackfish" documentary. 
[Nelvin C. Cepeda/San Diego Union-Tribune/TNS]
  2. Legalized medical marijuana signed into law by Rick Scott

    State Roundup

    TALLAHASSEE — Gov. Rick Scott on Friday signed into law a broader medical marijuana system for the state, following through on a promise he made earlier this month.

    Gov. Rick Scott signed legislation on Friday that legalizes medical marijuana in Florida.
  3. Line of moms welcome Once Upon A Child to Carrollwood

    Business

    CARROLLWOOD — Strollers of all shapes and sizes are lined up in front of the store, and inside, there are racks of children's clothing in every color of the rainbow.

    At Once Upon A Child, you often as many baby strollers outside as you find baby furniture and accessories. It recently opened this location in Carrollwood. Photo by Danielle Hauser
  4. Pastries N Chaat brings North India cuisine to North Tampa

    Business

    TAMPA — Pastries N Chaat, a new restaurant offering Indian street food, opened this week near the University of South Florida.

    The menu at Pastries N Chaat includes a large variety of Biriyani, an entree owners say is beloved by millions. Photo courtesy of Pastries N Chaat.
  5. 'Garbage juice' seen as threat to drinking water in Florida Panhandle county

    Water

    To Waste Management, the nation's largest handler of garbage, the liquid that winds up at the bottom of a landfill is called "leachate," and it can safely be disposed of in a well that's 4,200 feet deep.

    Three samples that were displayed by Jackson County NAACP President Ronstance Pittman at a public meeting on Waste Management's deep well injection proposal. The sample on the left is full of leachate from the Jackson County landfill, the stuff that would be injected into the well. The sample on the right shows leachate after it's been treated at a wastewater treatment plant. The one in the middle is tap water.