The Federal Housing Administration, or FHA, is an insurance fund controlled by the government (HUD, specifically) to protect lenders against borrower defaults. FHA has written what is required of the borrower in order to qualify for a loan backed by FHA insurance. Qualifications include a minimum down payment, minimum income qualifications and minimum credit requirements.
Fannie Mae and Freddie Mac do not have their own insurance funds; private mortgage insurance (PMI) companies such as MGIC or GMAC provide similar protection to lenders in case of borrower default for these loans. Fannie and Freddie have guidelines for qualifying borrowers for their loans and the PMI companies have their own that mirror Fannie’s and Freddie’s, for the most part.
What most people don’t know is that the qualifying income criteria are very similar for FHA, Fannie Mae, Freddie Mac and PMI companies.
Because of other departments within HUD (such as low-income/section 8 housing projects and Affordable Housing), FHA has been lumped into this misconception that it, too, provides loans for low-income borrowers.
FHA Loans are NOT Affordable Housing Loans
FHA loans do not have income limits where the borrower is restricted to making only a certain amount of money to qualify for the program. A person making $500,000 per year can opt for an FHA loan if it meets the borrower’s needs.
There are many condominium projects that have elements of Affordable Housing. Affordable Housing communities may be more difficult to get approval than a typical condominium project.
Getting approved by FHA does NOT make a community Affordable Housing. This legal covenant has to be written directly into the legal governing documents and if a condominium project is not declared to have Affordable Housing units, then there are no Affordable Housing units. If there are no Affordable Housing units, the Affordable Housing program cannot be used to purchase a unit in that community. This information provided to you by ACRI Community Realty FHA loan advisor: Eric Boucher.
The FHA Condominium Project Approval Team at ReadySetLoan.com is dedicated to helping condominium projects across the nation to obtain their FHA approvals or become re-certified with FHA. We can help your project.
Please contact ReadySetLoan with any questions regarding FHA condominium project approvals. You can email Eric at firstname.lastname@example.org or call Eric at 404-433-4565. He will be happy to answer any of your questions.
FHA Condo Approval Specialist
Cell Phone: 404-433-4565