The Trellis condominium complex in downtown San Diego’s Gaslamp Quarter has been added to HUD’s (The U.S. Department of Housing and Urban Development) FHA approved condos list.

FHA approval is an exciting development for this popular complex, known for its highly desirable Gaslamp location, and high-grade construction of concrete, steel, and glass. Existing Trellis homeowners will have reason to celebrate as buyers turn their attention on the building. Homebuyers using FHA financing are specifically looking at FHA-approved buildings, and this additional pool of buyers will undoubtedly domino into increased demand and property values.

FHA Means 3.5% Down Payment

FHA approval will allow buyers to get into Trellis homeownership with just 3.5 percent down payment, as opposed to the typical 20% down payment required with conventional financing. By way of example, currently listed for sale at $279,000 is an adorable, interior facing, quiet one-bedroom Trellis condo with 678 square feet on the third floor. Last week, a buyer interested in this condo would have needed a cash down payment of $55,800. Now, with FHA approval for Trellis, a buyer can purchase this same home by putting only $9,765 down.

Conversely, when buildings lose FHA approval, values will sometimes decrease, as in the case of Aloft in Cortez Hill. Aloft, a beautiful building with world-class amenities was built in 2007, but failed to sell out during the economic downturn. The developer converted the unsold units into rental apartments and did not renew the building’s FHA status. Because of rentals and low owner occupancy, obtaining financing in the building has become difficult, negatively affecting buyers and home values.

The FHA application process is lengthy, and a residential complex must meet strict criteria to qualify. HUD scrutinizes the building’s financial health to make sure various requirements are satisfied, including: (1) at least 50% of the units must be owner-occupied as primary residences; (2) no more than 10% of the units are owned by any one investor; (3) no more than 15% of homeowners’ dues are in arrears; and (4) the HOA must have sufficient reserve funds to maintain and preserve all amenities and features unique to the project.

Downtown San Diego Condos FHA Approved

The list of approved buildings is always changing. FHA approval has a limited duration, and must be periodically renewed with updated information from the HOA. A partial list of FHA approved buildings in downtown San Diego includes Aria, Alta, Breeza, Bayside, Parkloft, Columbia Place, CityFront, M2i, Palermo, Electra, Solara Lofts, and Watermark.

If you have your eye on a specific building and wish to know if it qualifies for an FHA mortgage, please call me for a complete list of approved buildings (619) 246-8400.