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Last week I received a call from a condo owner in Sterling Heights. She has had her condo on the market off and on a couple of times and would really like to sell it.  Pricing isn’t an issue, she is realistic about the over saturation of condos on the market and can price her condo accordingly.

Condition isn’t the issue – she has made several upgrades and it sounds like the condo is in nice condition.

What has kept her condo from selling? In my opinion (my 2 cents adjusted for inflation..):   The condo complex is not HUD approved.   Last month I wrote an article for home buyers who will be using an FHA mortgage and what they need to watch out for when choosing a condo.

Without having HUD approval on a condo any buyer using FHA or VA as their financing will not be able to purchase the condo.  In the under $100,000 condo market FHA and VA make up a huge percentage of the buyers financing.  Cutting those buyers out of the “pool” so to speak makes it extremely difficult for a condo owner to sell their home.

Conventional financing is still available for condos, but there is a much larger down payment and most first time home buyers do not have the funds to put 20-25% down on their mortgages.

Cash buyers & investors are still out there but unless the condo complex allows the condo to be rented investors won’t purchase it.

I could hear the frustration in the ladys voice as I explained to her the new HUD – FHA financing rules and also sent her an email with the links to HUDs website and explanations regarding this approval process.

What can she do? Talk to the association members and leadership and get the ball rolling to achieve HUD approval.   Yes, there is paperwork that has to be done.  Yes it can be time consuming.  However, not having HUD approval for your condo complex will bring property values down further for ALL the condo owners.    All condo owners should check and make sure their condo complex is HUD approved.  If not, contact HUD and start the process.

~Kris Wales~  A partner for your real estate needs in Macomb County MI
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