Current FHA condo project approvals will become invalid on 11/2/2009, and all condo projects will need to be recertified.  This applies to any condo groupings with FHA approval prior to 11/2/2009.  In the future every condo project will have to be recertified every two (2) years.

“Spot Loan” approvals will be eliminated after 11/2/2009.

Housing and Urban Development (HUD) which completes the approval process, will NOT accept any condo recertification packages until November 3, 2009. 

Since the majority of condo projects will need recertification, there will be substantial delays from FHA in completing the recertification and approvals.  HUD expects six (6) months, or more, in accomplishing this process.

Now, if this isn’t bad enough, here are some more changes FHA is throwing into the mix.  There will be new percentage numbers that will be part of the total FHA package.

Ø      Owner occupancy in condo groupings drops from 51% to 50%.

Ø      Presales for new construction also drop from 51% to 50%.

Ø      No more than 15% of total units can be in arrears on their home owner’s dues.

Ø      If a grouping has three (3) or less units, only one (1) can have an FHA loan.

Ø      Projects with four (4) or more units can have no more than 30% of the total with FHA loans/insurance.

The last one may be have the “scariest” affect on condo owners.  If a condo grouping has 100 units, and presently the project is FHA approved, and presently has 65 percent FHA insured loans, there will be no more FHA financing in that project until 36 percent of the owners sell and their buyers use some other type of financing.

Or, say the project has 100 units and 29 percent have FHA insured financing, and there are 3 units for sale – each hoping to sell with FHA financing.  This may mean that the first one to sell can use FHA while the others may not.

So, what’s the alternative?

The most popular form of condo financing is either FHA or VA.  VA now takes their lead in condos from FHA. 

Conventional loans are not an option since mortgage insurance is not easily available on condo loans with less than twenty (20) percent down payment. 

HUD has also addressed the “site condos.”  Effective immediately, FHA will allow single family financing on detached site condos.  FHA will consider them as “a singly family detached dwelling encumbered by a declaration of condominium covenants or condominium form of ownership.  Attached site condos are treated as any other condo.

December 1, 2009, is too late.

"We think this year's tax credit will certainly have a much bigger impact because it is a true tax credit which is also refundable," says Lawrence Yun, chief economist for the National Association of Realtors. "For instance, if you owe $1,000 in taxes and qualify for the first-time homebuyers tax credit, you will receive a tax refund of $7,000."

If the buyer holds the home for three years or more, the money need not be repaid.

Procrastinators will have to jump to it.  It takes 45 to 60 days to process a loan.  Banks, mortgage companies, and title companies foresee a pile up toward the end of November.  There are only so many people writing and processing loans, as well as closing and recording the loans.

That means that anyone who wants to take advantage of this outright tax credit should be under contract by September 1, 2009, at the latest.

Among other technicalities are that a buyer cannot have owned a home in the past three years.  If one party in a married couple has owned a home in the past three years, they are not eligible.

There is also an income restriction.  The credit phases out for individuals with an adjusted gross income of $75,000, or above and for married couples with a combined adjusted gross income of $150,000 or above.

Bottom line:  If you qualify, act fast, or time will pass you by.

Interest rates have been extremely favorable allowing many homeowners to refinance and bring their payments down.  In the last week they've started creeping up again as the debating in the Senate continues on how the stimulus package will end up.

In Anchorage at the end of last year, sale prices remained fairly stable from last year, though the total number of sales declined slightly.  Some areas of town did better than others as far as sale prices and number of sales.  I won't report a bunch of numbers because there are reasons numbers of sales declined in certain areas, like the number of new construction condos decreased.

List to sales price again remained stable with the sales price running from 96 to 98 percent of list price.  Across the board, the number of days on the market did increase anywhere from 5 to 30 percent.