Why FHA-driven first time home buyers may be running out of time

by Honeycrisp on April 26, 2010

Plus the latest list of FHA-Approved Manhattan Condominiums

We’re not in Kansas, anymore.  Translated to the NY real estate market, we’re not where we were 6 months ago.  The market has most definitely shifted and buyers looking to take advantage of FHA loans need to move quickly.  FHA approved buildings now limit the number of FHA loans in those respective buildings to 30%.  That’s right: after that 30% limit is reached, no mas.  This limit has come down from 100%, to 50% and now to 30%.  This has corresponded to the loosening FHA pre-sale limits:  previously, a building had to be 50%+ sold to qualify, whereas now it’s only 30%.

Who does this affect most?  First time home-buyers, to be sure.   They have taken advantage of putting only 3.5%-5% down to purchase a new home and still benefit from historically low interest rates at the same time.  In addition, many buyers who could otherwise afford to put 20%+ down have nonetheless chosen the FHA route to avoid locking up their assets and gain maximum leverage.

Overall, these trends are important, as a vast majority of the pick-up in sales volume over the last 6-8 months has come from lower priced properties whose loans fall within conforming limits.  The 30% threshold may mean that the attractive window of opportunity that has spurred these sales is quickly narrowing.  Therefore, while prices may not be spiking any time soon, the opportunity of cheap financing with minimal money down may be coming to an end.  

If you’re waiting for an extra 5% drop in prices or that $10k difference between your purchasing a property or not, it may benefit you to look at the other side of the equation and ask yourself:  how much are liquidity and low cost of capital worth to me?

As of today, there are 32 Manhattan Condos on the approved list, 105 for Brooklyn, 16 in the Bronx, 11 in Staten Island, 8 in Long Island City, and 2 in Queens, as per the US Department of Housing and Urban Development. Lastly, for those of you dying to know just which Manhattan condos are FHA approved as of now, here is the latest and greatest list :

145 WEST 150TH ST CONDOMINIUM
2280 FDB CONDOMINIUM
239 WEST 135TH STREET CONDO
453-455 W. 143RD STREET
99 JOHN DECO LOFTS CONDO
ACADEMY TWINS CONDOMINIUM
CARNEGIE PLAZA
CENTRAL PARK PLAZA CONDOMINIUM
FIFTH ON THE PARK CONDOMINIUM
GRIFFIN COURT CONDOMINIUM
IL TESORO
MANHATTAN VALLEY CONDOMIMIUM
METROPOLIS
OBSERVATORY PLACE CONDOMINIUM
PARC STANDARD CONDOMINIUM
RIVERWALK COURT CONDOMINIUM
TEMPO CONDOMINIUM
THE 100 WEST 93 CONDOMINIUM
THE 117 EDGECOMBE AVENUE CONDO
THE 121 EDGECOMBE AVENUE CONDO
THE 161 W 133RD STREET CONDO
303 WEST 149TH STREET
THE CONRAD CONDOMINIUM
THE DOVER CONDOMINIUMS
THE NICHOLAS CONDOMINIUM
THE RUPPERT YORKVILLE TOWERS
THE SAVOY WEST CONDOMINIUM
THE SEDONA CONDOMINIUM
TWO BRIDGES
WHITEHOUSE CONDOMINIUM
WILTON HOUSE CONDOMINIUM
WINFIELD CONDOMINIUMS

{ 4 comments… read them below or add one }

Andrew April 26, 2010 at 4:32 pm

How about a list of the latest and greatest for Brooklyn? Is that available. Thanks for the article btw.

Honeycrisp April 26, 2010 at 4:44 pm

Hi Andrew – glad you enjoyed it :)
The list is available, actually, and we were debating publishing it … it’s just that it’s 100+ buildings long … let me see what I can do in compiling it in a user-friendly version …

saho April 27, 2010 at 9:18 am

Williamsburg would be a nice start, please. And then another, and then…Thank you for your website

Nicole May 7, 2010 at 9:48 am

FYI – As per FHA Mortgagee Letter 2009-46a, the FHA concentration limit has been temporarily increased to 50% (Until December 2010) for New Construction and 100% for Existing Construction (meeting certain guidelines).

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