Is FHA Getting Out of the Condo Business?

New FHA guidelines will make it much more difficult for condominium associations to be certified for FHA financing. Without the certification, owners of condominiums will be unable to sell to buyers using FHA financing.

Prior to 2010, once a condo project was FHA-certified, the certification was good forever. Now any project that was certified prior to 2008 must apply for certification under the new, stricter rules, and must re-apply ever two years.

Until February 2010, a lender could get a "spot certification" of one unit in a non-FHA-certified project so a borrower could use an FHA loan to buy a condo. Not anymore.

According to this article in Inman News, the condo association must ensure that no more than 50% of the units can be occupied by renters. How is the condo association supposed to know this? Knock on every one's door every month, and ask who is living there?

Additionally, no more than 15% of the condo owners can be over 30 days late on their assessments. Obviously, the delinquency rate of the owners is always in flux, and it is particularly high when many of the units have been foreclosed and are owned by banks.

The biggest barrier to getting FHA certification is that the condo manager or board member filing the application is personally responsible for the accuracy of the application. The penalty for an inaccurate application is up to $1,000,000 and 30 years in prison! Who wants to take that kind of risk, when it's impossible to know that the information is accurate?

What does this mean for Tucson? If you check this list of FHA-certified condos in Tucson, only four projects have been certified since 2008. They are: Sunset Foothills Condominiums, The Villas at Hacienda del Sol, Pinnacle Canyon Condominiums, and Tierra Catalina Condominiums. All are north of River Road, in the foothills. Condo owners in these projects are probably not relying on FHA financing to get their condos sold.

The rest of the condos? Not certified. Not eligible for FHA financing. Without the FHA options, buyers will need a larger down payment and higher credit score. This reduces the pool of buyers. Few eligible buyers means lower sale prices for condos.

219 E 13th St

Do you love history? Oak floors and claw foot tubs?
High ceilings and big sunny windows?
A fireplace and spacious formal dining? An urban lifestyle? This is the home for you.
Living just half a block from Amory Park, you won't miss any of the fun as downtown Tucson revitalizes herself. The Children's Museum, Temple of Music and Art, 17th Street Market & La Placita Village (Tucson Meet Yourself! Folk Festival! Outdoor Movies!). Many hip new restaurants are nearby. One block to the planned 4th Avenue Trolley to University of Arizona.
Have you seen the fabulous griffin on Scott Avenue? She's only two blocks from this sweet home.


Three bedrooms and two baths in the main part of the house.
The kitchen has been updated with stainless steel appliances and tile counters, but still retains its antique character.
If you need a home office to impress your sophisticated clients, you'll love the two room suite with private entrance, storage and bathroom.
Maybe you would like some rental income? The previous office tenant paid $420 per month for five years, but left when her lease expired in December 2011. Or you could use the suite as a master bedroom or guest quarters. The floor plan is here. This is the vintage home of your dreams. This home sold for $267,000 on March 1, 2012.

May Residential Sales Statistics

The Tucson Association of Realtors has released the Residential Sales Statistics for May.

Average sale price was $168,453. Median sale price was $127,000. There were 1,257 sales in May, only slightly below the 1,270 sales a year ago. Fortunately, number of listings is down to 5,795, down 14% from last May.

3.8% Sales Tax on All Real Estate Sales!

Have you received a chain email like this:

This should help stimulate the Real Estate market! UNDER THE NEW HEALTH CARE BILL – DID YOU KNOW THAT ALL REAL ESTATE TRANSACTIONS ARE SUBJECT TO A 3.8% “SALES TAX”? YOU CAN THANK NANCY, HARRY & BARACK (AND YOUR LOCAL CONGRESSMAN) FOR THIS ONE.
IF YOU SELL YOUR $400,000 HOME, THIS WILL BE A $15,200 TAX.

Please, settle down and don't shout! The purveyors of this email can only wish the health care bill were this evil. According to factcheck.org and snopes.com, this tax only applies to people with income exceeding $200,000 per year. If the seller has lived in the house for two of the last five years, the first $250,000 in capital gains for a single person and $500,000 in capital gains for a married couple is tax free. Only the capital gains in excess of those amounts will be taxed at 3.8%.

Sales of vacation homes and investment properties are not exempt from this tax.

Most of us can't even dream about $250,000 in capital gains on the sale of our homes. This bill will generate so little tax revenue, and it has predictably created so much rumor fodder, I don't see why it was ever tacked on to the health care bill.

Vote for Tucson, The Best Town Ever!

Tucson is one of the top ten finalists in Outside Magazine's Best Town Ever contest. Voting for Outside Magazine’s “Best Town Ever” ends Sunday, June 26th at 9:00 p.m. Arizona time. The Old Pueblo needs your vote every day until then! Tucson is slowly gaining ground on Chattanooga, TN but we are running out of time and will not catch them unless you participate directly.

Today, Chattanooga is leading the pack with 6,019 votes. Tucson is in second place at 4,790 votes. This is probably because most people in Tucson are outside enjoying Tucson's fabulosity instead of sitting in front of their computers, but come on, take a minute and vote for Tucson!

Please cast your vote every day at facebook.com/OutsideMagazine. You will need to ‘like’ their page before you’re able to vote. You can vote until Sunday, June 26th at 9:00 p.m. MST.

This is So Wrong

Something is seriously wrong with Arizona when wonderful people like Laura, Jennifer and Jackson have to leave, but Senate President Russell Pearce, Sheriff Joe Araipo and the Wasilla Hillbillies get to stay.

I wish Baja Arizona actually had a chance of seceding from Maricopa County and rejoining the United States.

"C'est la Vie," Say the Old Folks

We bought a souped-up Hyundai, it was a cherry red GLE. Drove it down to Bisbee to celebrate the anniversary.

Steve and I met 20 years ago this month, and we decided that milestone deserves a celebration. We stayed at the beautiful vacation home of our friend Cynthia. She bought her sweet vintage home high on the hill overlooking Old Bisbee 33 years ago, before anyone knew that Bisbee would become such an artsy community. She was in Bisbee when Bisbee wasn't cool.

We had three days of being tourists. We checked out the Shady Dell airstream trailer court and diner,
and took the Copper Queen Mine tour.
We looked in galleries, were awed by the stained glass at St Patrick's and admired the art deco Cochise County Superior Court Building. Ate no fewer than three delicious meals at High Desert Market and Cafe on Tombstone Canyon, and had some good Mexican chow at Santiago's in Brewery Gulch. Cynthia proudly gave us a tour of the impressive Copper Queen Hospital where she works.

Believe it or not, list prices of small historic homes are higher in Bisbee than they are in Tucson. However, the amazing 10,615 square foot, 11 bedroom, 9 bathroom Loma Linda mansion in Warren can be had for only $672,000. Designed by the architect Henry Trost, it was built for a mine executive in 1907, and was known as a rock star party house in the 70s. Many of the homes in Bisbee were demolished when the Lavender Pit opened, and Loma Linda lost its extensive orchards. You will have to overlook the towering mine tailings that now come almost up to the back porch, but it's a steal, marked down from its 2007 list price of $2,000,000.
C'est la vie, say the old folks, it goes to show you never can tell.