FHA Loans: No Big Deal in Manhattan
There has been a lot of hype lately about FHA loans. There have been numerous articles not only in respected publications like the NY Times and the Wall Street Journal, but in blogs and websites from lawyers and lenders.
Many seem to confuse Manhattan with the 4 other boroughs that make up the City of New York. There are many single family houses in Queens and Brooklyn, the Bronx and Staten Island.
In Manhattan about 75% of available housing is in rental buildings. Of the approximately 25% of housing available for ownership about 70% are cooperatives.
* FHA does not give loans in Coops. The remaining apartments for sale in Manhattan are condominiums.
* Most Manhattan condos (approx: 98%) have "first right of refusal"
FHA does not give loans in buildings where there are any "restrictive covenants" right of refusal is a restrictive covenant.
In all of Manhattan there may be about 15 condominiums that have applied and been approved for FHA loans. They are new developments primarily in "fringe" neighborhoods or "up and coming neighborhoods," They are usually in new construction buildings that have had problems selling units.
FHA is a government agency that insures the loans issued by private lenders. The government guarantees the loan payment to the lender if the borrower/home owner defaults. FHA loans traditionally are for people who have less than 10% for a down payment. FHA loans allow 96.5% financing (3.5% down) and for people who don't have good credit scores.
Because of all the hype people qualified for conventional loans are asking about FHA loans. An agent called me about about one of my coop listings. He told me his buyers are very qualified and they are pre-approved for an FHA loan. I said "that's nice but FHA doesn't give loans in coops and even if they did the coop has a minimum down payment requirement".
Interest rates are at all time lows. There are many loans out there today. Call a mortgage broker or mortgage banker located in Manhattan. Make sure you tell them you are looking at buying a coop or a condo in Manhattan. Manhattan is a tiny densely populated island. It is important to understand Manhattan housing. Everything is different here.
Many seem to confuse Manhattan with the 4 other boroughs that make up the City of New York. There are many single family houses in Queens and Brooklyn, the Bronx and Staten Island.
In Manhattan about 75% of available housing is in rental buildings. Of the approximately 25% of housing available for ownership about 70% are cooperatives.
* FHA does not give loans in Coops. The remaining apartments for sale in Manhattan are condominiums.
* Most Manhattan condos (approx: 98%) have "first right of refusal"
FHA does not give loans in buildings where there are any "restrictive covenants" right of refusal is a restrictive covenant.
In all of Manhattan there may be about 15 condominiums that have applied and been approved for FHA loans. They are new developments primarily in "fringe" neighborhoods or "up and coming neighborhoods," They are usually in new construction buildings that have had problems selling units.
FHA is a government agency that insures the loans issued by private lenders. The government guarantees the loan payment to the lender if the borrower/home owner defaults. FHA loans traditionally are for people who have less than 10% for a down payment. FHA loans allow 96.5% financing (3.5% down) and for people who don't have good credit scores.
Because of all the hype people qualified for conventional loans are asking about FHA loans. An agent called me about about one of my coop listings. He told me his buyers are very qualified and they are pre-approved for an FHA loan. I said "that's nice but FHA doesn't give loans in coops and even if they did the coop has a minimum down payment requirement".
Interest rates are at all time lows. There are many loans out there today. Call a mortgage broker or mortgage banker located in Manhattan. Make sure you tell them you are looking at buying a coop or a condo in Manhattan. Manhattan is a tiny densely populated island. It is important to understand Manhattan housing. Everything is different here.
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