Is It a Condo or a Townhome?
Using an FHA loan? This one is for you!
In Maryland, we have several types of residential properties: Luxury/Executive Homes, Single Family Homes, Traditional Townhome, Condo and Condo Townhome. Most buyers are familiar with these styles of homes.
Condos and Condo Townhomes are recorded and treated the same. Even though a Townhome may appear to be a Townhome, in Maryland, it could be a Condo! If you are comfortable with the restrictions of a Condo, but are purchasing a Townhome with Condo rules, you are good. But this is just the first hurdle.
Condos and Condo Townhomes have a little something in common that isn't well known by buyers and some agents. Condos and Condo Townhomes MUST be on the FHA Approved Condo List, if you are buying using an FHA loan. If the Condo or Condo Townhome is not on the approved list, the second option could be using a Conventional loan assuming the buyer is eligible. Beware, this isn't always an option either.
There are a few more things that could interfere with the purchase of a condo. Two major items are:
1. Delinquency Rate - This is referring to the number of delinquent condo fees in the the community.
2. Investor vs Owner Ratio - This is referring to the number of Investor owners vs Owners.
If these numbers aren't in the appropriate range, even if the Condos are on the FHA Approved Condo List, the Conventional financing could fall through. At that point, the only purchase option would be cash.
Visit the FHA Approved Condo List to search for condos. This list will give you a status of the registered Condos. However, it's a good idea to have the seller call and find out additional information.
While this crucial information for buyers, sellers you should be aware also. Find out if your Condo or Condo Townhome is on the FHA list or not. Suppose you get a FHA buyer and 2 weeks before you close find out that it can not move forward. A word to the wise...
QUICK TIP:
A quick trick to tell if the property is a Condo Townhome or Townhome is if the address is identified by a unit number. For example 123 Main Court #A.
Always be sure to do your due diligence when purchasing this type of home.
WHAT NEXT?
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Helene Kelbaugh, REALTOR
Internet Marketing Specialist Designation
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Keller Williams Realty Baltimore
2936 Odonnell Street
Baltimore, MD 21224
410-342-4444o 443-465-8443 m
410-342-0873 fax
www.HeleneSellsHomes.com - Search for Homes
www.BaltimoreIsBeautiful.com - Baltimore Homes
www.MobileAppHomeSearch.com - Use code KW2JZ0QHX to connect with me
2936 Odonnell Street
Baltimore, MD 21224
410-342-4444o 443-465-8443 m
410-342-0873 fax
www.HeleneSellsHomes.com - Search for Homes
www.BaltimoreIsBeautiful.com - Baltimore Homes
www.MobileAppHomeSearch.com - Use code KW2JZ0QHX to connect with me
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