Hoboken FHA Approval | FHA Condos, Buyers Beware

Hoboken FHA Approval - FHA Condos, Buyers Beware


Hoboken Buyers - you should know this information.


First, it used to be, that if you were looking for FHA financing, condo's could go through a requirement list and then a process to get what's called a 'spot approval.' Once going through this process, an FHA buyer could buy into almost any building that did not exceed the FHA loan cap. However, with new FHA guidelines products this is no longer the case, and hasn't been for months.

• If a building is not already FHA approved, then you cannot buy a unit in the building if you are an FHA buyer. 

FHA Approved buildings: Refer back to my post last year on FHA Buildings for the list.


Do I have to buy FHA?

I have run into many Hoboken buyers that say they need to buy FHA when in fact that is not the case. Many do not know this, but with the way mortgage market is right now, lenders are making more money by selling you an FHA product. In the end, the FHA loan will cost you more money than conventional financing through higher mortgage insurance premiums, because on a FHA loan you pay an upfront premium, as well as a higher monthly premium. In fact, these premiums are going up in the next few weeks making FHA loans more expensive than before.

I am surprised that more Hoboken real estate agents do not know that you can purchase a Hoboken condo with conventional financing and just 5% down payment. *With a $417,000 loan max and the proper credit requirements.   However, not every lender offers this type of product, and most will tell you that it's not possible, but one of my preferred mortgage broker does, so if this is something that would fit your situation, make sure you contact him directly or reach me and I can put you in touch.

Now, with that said

• To get the best rates, you'll want a credit score of 720 or better and 20% down payment

BUT, if you are a buyer with a credit score of 680 or better, you still can be approved for a conventional mortgage product.

Also, there are only about 29 buildings in Hoboken that are FHA approved, limiting you on what you can buy.  When shopping for a mortgage, if you are quoted FHA rates, and told it's better/cheaper for you, make sure that you ask for an estimate on a conventional loan with the same down payment. Always ask questions.

Feel free to consult my preferred mortgage broker Michael Mundy of Pinnacle Mortgage! Or email me if you're looking for a list of what's available in FHA approved buildings.