More New FHA changes

It was announced recently that FHA has delayed the changes in spot approvals and condo financing until December 7th 2009. This is good news for people trying to purchase and use the spot approval process. Basically a spot approval grants the use of condo projects that aren't FHA approved but meet all the rules and regulations and hence can be approved "on the spot" Because of the difficulties that most major housing markets still face FHA has offered additional lenience for home buyers. This is good news especially for first time home buyers as the vast majority of first time buyers needs the FHA financing unless they have 20% down. These rule changes if finally implemented will cause further stress on our already fragile housing markets around the country.

For example on condo pricing in and around the DC area some Virginia counties and DC itself are slated to see a shortage of available affordable condo units in the in the next 12-18 months. When this happens we should see a rather rapid increase in prices and a decrease of homes in this market for sale. By contrast Montgomery county is 5 years of inventory and PG is a whopping 14 years. Maryland is definitely behind Virginia in terms of a housing recovery. It is logical because prices fell there first and have now begun to at least stabilize. Whether builders can obtain financing in the credit crunch remains to be seen and could delay the recovery. This is needed in my opinion because homes are bottom up. If we can get first time buyers in the condos we can get those people in the townhouses, those people in smaller single family homes and those people in larger homes. A rising tide really does lift all boats. It's just a temporary delay but it all helps and perhaps the rules can and will be tweaked in this interim period. Please let me know if you have any questions.

Thanks,
Brent