1. FHA condo approval dramatically increases the pool of potential buyers
Statistics show that approximately 60% of new home buyers intend to use an FHA Loan. If your community does not have FHA condo approval, you potentially limit the buying pool to only 40% of home buyers.
NOTE: These are “regular” buyers – an FHA loan is not associated with low income HUD programs, such as Section 8. In some counties, an FHA insured loan can reach up to $625,500 in most areas of the US and $800,000.00, or more, in high home value states such as Hawaii. Since the recession, most American buyers are using FHA insured loans, and this will be the trend for years to come.
2. Increased Home Value
FHA approved Condos have a larger pool of prospective buyers, therefore increasing competition and demand for the product. This can result in higher purchase prices and an increase in market value. This may increase the value of units throughout the community.
Some real estate agents won’t show units that aren’t FHA Approved. Being approved sets your community apart from others in your same area.
Going through the FHA condo approval process gives your Homeowners the sense that you as a Board cares about the community and wants it to thrive. By avoiding the approval process it will hamper your owner’s when they go to sell their units.
5. Less Renters in the Community
Generally speaking, communities without FHA approval will attract buyers that can make large down payments. These buyers may be investors who will rent out the property for a profit.