I wanted to know if someone could tell me a little bit more about the FHA rules as they related to condos and PUDs. I am familiar with the FHA website where you can check to see if condo complexes are approved, and have heard of the spot approval process.
…Also, what is the application of the FHA rules to twinhomes.
You are a Real Estate Attorney and are not familiar with this?? Are you licensed for State of California?
Ok.. onto the main stuff. First an exercise. You are stating $600k to $700k for about 2000 sq ft or less. Using $650k as the mid-point and the 2000 sq feet, you are looking at paying $325/sq ft, round that down to $320/sq ft. The exercise is to mark off 1 sq foot on the floor and then from your wallet, take out $20 bills and place them into that square until you have placed $320 into that square (it takes 16 bills). Step back and then look around. In buying a property at $320/sq foot, you will be doing that for every square foot you see..(might be useful to measure the dimensions of the bedroom, determine square footage, and then calculate the cost of just that room). Is the one square foot of concrete, rug, drywall, roof-tile worth $320 (Go to Home Depot or Lowes if in doubt).
I am NEW real estate attorney. I’d like to think that makes me moderately savy. We want to buy sooner rather than later, and I just started a new position. Also, am a San Diego native.
Careful about bantering the ‘savy’ word around. There is ‘savy’ and then there is really having knowledge and experience. The latter comes from experience and actually ‘doing’. To make a comment like ‘With all due respect, maybe you should hold your tongue next time.‘ address to such people may not make oneself look too good. Its almost like a first year journeyman carpenter claiming that the master carpenter does not know what he is talking about and should just shut up.. There are a few ‘master carpenters’ on this board that can plunk down $700k cash for a place.
One thing you need to realize is that this board gets people posting all pro buying all the time and then they get all bent out of shape when their bubble gets slightly pricked or popped. This is why the recommendation to read the bubble primer on the first page.
Anyway, right off the bat.. I see a potential problem with FHA. How long have you been employed at the same employer? You stated that you are a ‘NEW’ real estate attorney. FHA requires a minimum of 2 years (consistence of salary) at the same employer. There are income to debt ratios too. Second problem is with the loan limit. FHA’s limit is similar to Fannie/Freddie.. 10% down on $600k gives a loan of about $540k which is above Freddie and Fannie limits. In addition, I saw a note to the effect that an upper limit exists of around $550k for San Diego FHA loans. The limits rise for multifamily dwellings, but that only applies if you are purchasing the whole dwelling(ie. duplex). Your lenders should know the limits.. Here is a HUD number to call to get more info — (800) 569-4287
As for purchasing a house, I would wait a bit.. it ain’t over yet. The other shoe has yet to drop. In buying a house w/ 10% down, you are using 10:1 leverage. Leverage is great when going up.. but disaster when going down. A drop of 5% in house prices will change your 60k down to 30k. 15% drop means that your down payment is gone and now you owe an additional 30k on top of the mortgage payments you have been making (note: Real Estate does not always go up.. last drop lasted 6+ years, cycles tend to run 12 years. This last up-cycle was a doozy.)
