This article is for the condo buyers out there...yes, people are still buying condos, some by the boatload. With the condominium market feeling some of the hardest hits this market has to offer, prices make them ripe for the picking.

However, buyers need to do their due diligence. Increased foreclosures have lead to a deficiency in the condo fee revenue taken in by condo associations. This adversely affects the appearance of the complex, the maintenance of the complex, and the operations of the condo complex. A decrease in the amount of operating funds MAY also lead to increased fees for unit owners OR a special assessment to make up the shortfall. Only in dire situations does the Association declare bankruptcy or dissolve, which can be catastrophic for owners.

Florida state law allows Buyers 3 business days (on existing condos) to review the following:

1. Condo rules, regs, and governing documents
2. Articles of Incorporation
3. Condo Questionnaire, aka Q & A
4. LATEST YEAR END FINANCIALS

With respect to #4, this is the most important info a buyer can receive. However, it can also be outdated and misleading. Imagine a scenario where a buyer is purchasing a condo in December 2010. By law, they must be given the latest year-end financials, that being 2009. If the Association has experienced a rash of non-payment of dues or foreclosures resulting in unpaid monthly fees, the full story may not be in those 2009 financials. So how do you get the full story?

1. If the complex has a website, explore it thoroughly. Some allow visitors to examine their docs and financials. Most likely, those documents will be reserved for residents, but there is a chance you can see them.

2. Ask for the approved financial statement from latest month available. It should include a balance sheet with year-to-date and budgeted amounts as well as a Profit and Loss statement. Some complexes mail to owners so the seller may be able to provide.

3. Ask for Board meeting minutes going back 6-12 months. This will give you insight into any financial issues cropping up OR whether a special assessment is coming down the pike.

4. Speak with a Board member. As a President of a large HOA with a $350,000 annual budget, I am always willing to discuss our finances with potential residents. After all, they will stake in the financial viability of our association. Board members are more in tune with finances and maintenance issues which may lead to increased fees or special assessments.

5. Speak with a resident. Living in a small community, unit owners are normally in tune with the latest news - and many are willing to share that info, especially to new buyers. However, use caution - rumors and false info can sometimes be propagated by residents as the truth. Verify all info.

6. Speak with the condo management company if they have one. Call the company and find out who is in charge of your particular complex or building. Remember, they are super-busy and normally stressed so BE COURTEOUS. If you have a lot of questions, offer to email them to the manager.

Are you FHA-Approved????

That's an important question all condo, townhome, and villa owners should be asking.

Why? Great question.

The government has a program run through the Federal Housing Administration that will allow qualified borrowers access to mortgages of UP TO 96.5% of the home's value (notice I did not say contract price, as an FHA appraisal will supercede a contract price). The borrower has to come up with the other 3.5% down payment, as well as closing costs. Closing costs can be paid by the seller on behalf of the buyers.

This is a terrific program that gets buyers with meager savings and blemished (but not sub-prime) credit into homes. Think first-time homebuyers, newlyweds, single parents, lower-income, etc. Truly a great program that encourages home ownership among a class that doesn't qualify for conventional loans.

Ok, so that's FHA in a nutshell. How does that help you, the condo/TH/villa owner? Well, since the 100% loans have gone the way of the dodo bird (non-existent) it is one of the most popular loan programs in the market today, aside from VA loans. This means more and more buyers are qualifying under this program. THE FLY IN THE OINTMENT IS THAT THE COMPLEX HAS TO BE APPROVED BY THE FHA FOR FHA LOANS.

It's an involved process with forms, documentation, and some elbow grease. Some complexs, due to their restrictions, will never qualify. However, it's well worth it for enterprising residents to ensure they have explored getting approved for FHA loans.

How can you tell if you're already approved? Luckily, FHA has a continuously updated website to check. It's: https://entp.hud.gov/idapp/html/condlook.cfm

Most likely your complex will not be approved, but it's normally for lack of trying. Once approved, it's something you want to SCREAM from the rooftops and let all buyers know. Ask you Association if they have ever tried to get approval. If they have not, volunteer to be a liaison and get them approved. Visit HUD.gov for more info.

FHA is a gift to buyers AND SELLERS so do your best to take advantage of it today.