According to the Mortgage Bankers Association FHA and VA loans comprised 36% of the mortgage applications in the month of June – which is a lot. There’s a really simple reason for this huge share of the mortgage market and it should come as no surprise to anyone. Since banks have stopped loaning 100% or more of the purchase price to buyers and people have had to come up with real down payments the government is the only game in town for low down payment mortgages. And there is a huge demand for low down payment mortgages.
Now if you are selling a single family home it’s relatively easy for the buyer to get FHA financing – assuming the house is in decent shape. However, condos are a different animal. There are a whole host of reasons that a development won’t qualify and the condo itself can only be mortgaged for $410K.
So you would think that condo listing agents would be all over the FHA program to make sure that their listings are eligible for this government giveaway. But you would be wrong. We have buyers that need FHA financing and there is no point in showing them condos that won’t qualify. There’s actually a field in the MLS where the listing agent can check the types of financing options available but it’s rarely used and even if it is used the FHA option is overlooked. So the first thing we do is call the listing agents to find out if they think the development will qualify for FHA financing. And you would be surprised how often the agents don’t know and don’t seem to care to find out. Well, let’s face it. It’s only 36% of the potential buyers.