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Pros and cons of Federal Housing Administration certification?


This question is submitted by Melanie P. out of New Jersey


What are the pros and cons of Federal Housing Administration certification which allows resident owners to get a mortgage with a low down payment? 

Our complex used to be FHA-certified. At some point, the BOD decided to drop it and didn't tell anyone. It has now been about 15 years that we are not FHA certified. When we found out, they stated that they felt it was better to not be FHA certified (we were about 75% owner-occupied) because the low down payment would attract lower-income buyers who may fall behind on the maintenance fee. 

What happened was that investors bought a lot of properties and we now have transient renters. While some do stay for years, others have had different problematic tenants. Now we are hovering around 50% owner-occupied. 

For buildings that are eligible for FHA certification, have you had a problem with lower-income owners? What about home values? Is there any difference in home values with FHA certification? The certification would give a chance to a bigger pool of buyers which would mean more competition. Does it result in higher property values?




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Answers (8)

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