Condo’s FHA Approval Expiration Date Critical to Sale of Condo

J.D. from outside of Connecticut writes:

Dear Mister Condo,

I have a buyer interested in my condo and ready to put in an offer and is FHA approved. The HOA’s FHA approval runs out in 37 days. If this buyer gets an offer in before that date can he still get an FHA mortgage?

Mister Condo replies:

J.D., congrats on finding a buyer for your condo. FHA approval is typically required by banks offering mortgages because they effectively resell the loan to the FHA once the transaction is complete. The offer is only going to be as good as the mortgage to back it up and if the bank gets wind of the FHA approval lapsing, they will very likely kick it back as it would no longer be in their compliance. The closing date is the important date. The offer date is likely to not be that relevant in the process. My advice is to alert the buyer so that he can alert his banking officer and get a ruling from the bank before he makes his offer. After all, an offer that cannot be funded really isn’t an offer at all. Good luck!

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