If you’re a real estate investor who is considering building new condominiums it is a two-step process with regard to financing. The first step is financing the new construction and the second step addresses the financing requirements of your buyers.

Yet both developers as well as condo buyers foundfha spot approvals coming back that getting a condominium project approved is no small matter. But with regard to FHA financing, those loans preferred by first time homebuyers, the process may soon become a lot easier…and provide additional value to individual condos.

Condominium projects must be approved using established guidelines set forth by Fannie Mae, Freddie Mac or government-guaranteed loans by VA and FHA. During construction, developers and the sales team should take the necessary steps to get the project approved. However, unfortunately that is sometimes an afterthought and the developer comes to the conclusion that it’s the buyer’s responsibility to arrange financing, not the developers. At face value that’s certainly a true statement but that will also hinder sales. If a project isn’t approved, the project must go through an approval process that can be both time consuming and costly. If a project is approved, then any purchase after the initial approval bypasses future condo approvals.

Prior to the housing debacle if a project wasn’t approved then a “spot” approval could be performed by a lender. The lender would run down a checklist of documents needed, verify the data and approve the loan without needing to send it to FHA. That spot approval went away in 2009. Yet FHA is under increasing pressure to revert back to the old process from the National Association of Realtors and others according to an article in Inman News. If in fact the effort is successful, it can both facilitate condo sales using FHA financing while keeping selling prices higher as available financing increases demand.