Can I Buy a Santa Maria Condo with FHA Financing?

Oak Creek Villa Condos in Santa Maria, CA

Can you buy a condo in Santa Maria with FHA financing? The answer is yes you can, but it is very difficult lately. Fannie Mae enacted guidelines in early 2009 which have impacted the condo market tremendously. These guidelines were meant to encourage owner occupancy and stability in condo associations but in many instances they have ended up penalizing associations not already in conformance with those guidelines and making it all but impossible for them to ever conform. Specifically, if over 15% of the homeowners in a condo association are delinquent (failing to pay their dues in a timely manner) or if more than 50% of the units are rented out, FHA buyers will not be able to buy a unit in that complex. That is a huge blow as it means that those units will mostly go to cash buyers, who ironically will probably keep that association in a non-conforming position by renting out the unit. Complexes that already have a majority of renters, or that have been hit by a high number of foreclosures (thus increasing their delinquency rate) end up penalized by the new guidelines which preclude FHA buyers (who are all owner occupants) from buying in their development. And, when the prices in a development sink to the level that only cash buyers want to pay they tend to take a tremendous dip. It is important to note, that you can still obtain financing in these developments. Smaller local banks will often still lend on these units but the terms do not mirror FHA buying terms. Often they require downpayments of at least 25% and the amortization time frame may be shorter than 30 years — thus increasing the monthly payment obligation.

It is not impossible to buy a condo with FHA financing. However, in light of the new guidelines, I believe non-cash condo buyers should focus heavily on the associations which are already FHA approved. And, cash buyers should focus on the associations not in conformance with Fannie guidelines as they offer the best bargains in this market. You can search for FHA-approved condo projects here. In Santa Maria, FHA approved condos currently include Knollwood, River Ranch, Village Greens, and Oak Creek Villas. If you are interested in buying a condo in one of these developments, please send me an email at, or give me a call at (805) 878-9879.

tniright_logo1Tni LeBlanc, JD, MA, e-PRO
Broker/Owner, Mint Properties
(805) 878-9879,

*Based on the information from the Central Coast Regional MLS. Neither the Association, the Multiple Listing Service, or Mint Properties guarantees or is in any way responsible for its accuracy. Data maintained by the Association or its MLS may not reflect all real estate activity in the market

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