FHA Villa/condominium/etc what form to use?

[jake21]

I have an important question about FHA condominiums. I am having a problem since FHA is so much more common than before. I am from the Saint Louis, Missouri area. I have always been able to determine which form to fill out (1004 or 1073) for "villas" but now with FHA I'm worried that one or the other could result in denial for a borrower with FHA, making my decision that much more important. I understand loan officers want them on 1004's because LTV's are more favorable for SFR than Condo, this is not the issue, I just want to be correct. 2 questions

1. Will FHA do condominiums that are not specifically listed on their approved condo website and is there a way to get the complex approved if they are not on the FHA approved condo list?

2. What form do you use for villa/condo/attached SFR? please read below before answering. I understand that a condo will have a blanket insurance policy, all the owners will equally own a portion of the entire complex exterior lot, individual owners only own the inside. I understand a villa is a physical description and condominium is a legal idea wether it is attached or not. Here is my problem I run into these "villas" that kinda fit the description of a condo and attached SFR. In one county (Saint Charles) I work in they zone it Residential Condo but then give each unit their own individual lot, of course the individual owners pay a fee to cover all exterior maintenance and HOI(home owners insurance blanket policy) so it kinda goes both ways which way should I go? Then one county I work in (Saint Louis County) zones them SFR but equally divides entire lots? Further the Villas in each county are in all reality the same. So these "Villas" have similarities between a SFR and a Condo but never entirely one or the other, how should this be dealt with. Hopefully someone familiar with my area can help. Thanks.

 

[Lee Lansford]

I have an important question about FHA condominiums... What form do you use for villa/condo/attached SFR?... So these "Villas" have similarities between a SFR and a Condo but never entirely one or the other, how should this be dealt with. Hopefully someone familiar with my area can help. Thanks.

Here's my question for you: Read the Legal Description for the Subject; does it state "condominium" or not? Therein lies your answer.

As to zoning: the zoning classification is not the determining factor.

 

[timd354]

I have an important question about FHA condominiums. I am having a problem since FHA is so much more common than before. I am from the Saint Louis, Missouri area. I have always been able to determine which form to fill out (1004 or 1073) for "villas" but now with FHA I'm worried that one or the other could result in denial for a borrower with FHA, making my decision that much more important. I understand loan officers want them on 1004's because LTV's are more favorable for SFR than Condo, this is not the issue, I just want to be correct. 2 questions

1. Will FHA do condominiums that are not specifically listed on their approved condo website and is there a way to get the complex approved if they are not on the FHA approved condo list?
Yes, the lender can get a condominium that is not listed approved under a "spot approval" procedure as long as the condominium meets certain guidelines. The spot approval procedure is laid out in a mortgagee letter (I forget which one, but it is one from several years back)

2. What form do you use for villa/condo/attached SFR? please read below before answering. I understand that a condo will have a blanket insurance policy, all the owners will equally own a portion of the entire complex exterior lot, individual owners only own the inside. I understand a villa is a physical description and condominium is a legal idea wether it is attached or not. Here is my problem I run into these "villas" that kinda fit the description of a condo and attached SFR. In one county (Saint Charles) I work in they zone it Residential Condo but then give each unit their own individual lot, of course the individual owners pay a fee to cover all exterior maintenance and HOI(home owners insurance blanket policy) so it kinda goes both ways which way should I go? Then one county I work in (Saint Louis County) zones them SFR but equally divides entire lots? Further the Villas in each county are in all reality the same. So these "Villas" have similarities between a SFR and a Condo but never entirely one or the other, how should this be dealt with. Hopefully someone familiar with my area can help. Thanks.

Whether or not a property is a condominium depends on the legal documents regarding the property and nothing else, not zoning, not the physical layout of the property, etc. If a property is set up as a condominium, then it is a condominium. IF it is not, then it is not. It is really that simple.

 

[ghrousseau]

I have an important question about FHA condominiums. I am having a problem since FHA is so much more common than before. I am from the Saint Louis, Missouri area. I have always been able to determine which form to fill out (1004 or 1073) for "villas" but now with FHA I'm worried that one or the other could result in denial for a borrower with FHA, making my decision that much more important. I understand loan officers want them on 1004's because LTV's are more favorable for SFR than Condo, this is not the issue, I just want to be correct. 2 questions

1. Will FHA do condominiums that are not specifically listed on their approved condo website and is there a way to get the complex approved if they are not on the FHA approved condo list?

2. What form do you use for villa/condo/attached SFR? please read below before answering. I understand that a condo will have a blanket insurance policy, all the owners will equally own a portion of the entire complex exterior lot, individual owners only own the inside. I understand a villa is a physical description and condominium is a legal idea wether it is attached or not. Here is my problem I run into these "villas" that kinda fit the description of a condo and attached SFR. In one county (Saint Charles) I work in they zone it Residential Condo but then give each unit their own individual lot, of course the individual owners pay a fee to cover all exterior maintenance and HOI(home owners insurance blanket policy) so it kinda goes both ways which way should I go? Then one county I work in (Saint Louis County) zones them SFR but equally divides entire lots? Further the Villas in each county are in all reality the same. So these "Villas" have similarities between a SFR and a Condo but never entirely one or the other, how should this be dealt with. Hopefully someone familiar with my area can help. Thanks.

1. Yes lenders can follow a procedure to do spot approvals. My company does them but they are a PITA and you have to be careful and get all the required documents. This is the lenders responsibility. Also, all condo's that are approved still require a 51% letter which basically is to verify that the owner occupancy ratio of the project is at least a minimum of 51% primary residence. This also the DE Underwriters job.

2. Condominium is a property right more restrictive than fee simple. If it is a condo per the legal description on title then it goes on a 1073. If it is attached PUD or Detached PUD then 1004.


"I understand loan officers want them on 1004's because LTV's are more favorable for SFR than Condo" Investors price condos different. They also have to meet minimum requirements for owner occupancy ratios. Loan officers do this because they are committing fraud.