Are you a Kirk­land condo owner think­ing of putting your condo up for sale?  Or are you look­ing to buy a condo in Kirk­land?  Sub­sti­tute Belle­vue, Red­mond, Bell­town, or any other Seat­tle area condo neigh­bor­hood, the answer may be critical.

Condo: the afford­able first-time home owner option

The down­turn in real estate has hurt Seat­tle area con­dos more than sin­gle fam­ily homes. Because of the shared own­er­ship of the “com­mon” areas, con­dos have always been more dif­fi­cult to finance than homes.  At the same time, con­dos were, and still are, the afford­able entry level to first-time home ownership.

Con­dos and the chang­ing FHA loan process

The low down pay­ment require­ment — cur­rently 3.5 — make FHA insured mort­gages the favorite forms of financ­ing for first-time buy­ers.  Lenders bear less risk because FHA will pay the lender if a home­owner defaults on the loan. How­ever, bor­row­ers must meet spe­cific FHA require­ments to qual­ify for FHA insur­ance.  For condo buy­ers there is another hur­dle:  the condo com­plex has to be FHA approved.

Until recently a lender could obtain a so-called “spot approval” for a spe­cific con­do­minium unit in an oth­er­wise not FHA approved con­do­minium com­plex.  The cri­te­ria for such an approval were com­plex and the out­come uncer­tain. Still, it could be done.  Now, new rules are in place.

What’s HRAP/DELRAP?

HRAP stands for HUD Review and Approval Process,  DELRAP for Direct Endorse­ment Lender Review and Approval Process.  In short,  either process requires that a con­do­minium project must be approved before appli­ca­tions for FHA mort­gage insur­ance can be processed for indi­vid­ual units.

Luck­ily, there is an offi­cial  HUD web­site where you can find out if a condo qual­i­fies for FHA insured mortages.  Click on the help link to learn about how to use the online form.

Strangely, the site does not oper­ate 24/7.  “Your request could not be processed at this time. Please try again later.  Nor­mal hours of oper­a­tion are from 8 am to 9 pm East­ern time Mon­day through Fri­day.”  (Dont for­get to turn off the the web site!)

Good news for Kirk­land Springs condo sell­ers and buyers.

Using the form dur­ing the hours of oper­a­tions I found out that Kir­land Springs in Juanita is now an FHA approved condo com­plex (since Jan­u­ary 8, 2010).  More good news is that my condo list­ing there has found a new buyer. We have reached mutual agee­ment. Unlike the first two buy­ers who qual­i­fied for financ­ing under the old spot approval FHA rules and ulti­mately were unable to pur­chase, this  one is using con­ven­tional financing.

Final Call for $8,000 and $6,500 buyer tax credits

The dead­line for the buyer tax credit pro­gram (first-time and repeat buy­ers) is fast approach­ing. The trans­ac­tion must close by April 30, 2010 to qual­ify.  Go to my web­site for the details and get moving.