At FHA Review I’m asked this question daily. The interesting part about this seemingly simple question is that it’s often loaded with emotions and opinions. The majority of realtors, lenders, home builders and community association professionals view FHA Certification as a benefit to a Condominium Association.
People who oppose FHA approval don’t always have all the facts, or have misconceptions about the people who use this type of financing.
The clear benefit of FHA project approval is that homes are made available to a larger pool of buyers. FHA loans also:
- Increase home ownership,
- Support first-time buyers,
- Keep the number of rental homes in a community lower,
- Serves as a third-party stamp of approval.
However, People often say they “don’t want FHA buyers” in their communities. The conception is that somehow FHA borrowers are less qualified, and these loans are made for people that can’t afford them.
This type of thinking is absolutely false and can potentially lend itself to a discrimination claim. The HOA cannot control who buys property in the community unless purchase approval is required in the governing documents.
While there may be reasons that the Association does not qualify for FHA Certification, simply refusing to be approved is not the prudent way to approach the subject.
