FHA eases rules for condo mortgages

As of October 15, the Federal Housing Administration (FHA) will insure mortgages for selected condominium units in projects that are not currently approved.  An individual unit may be eligible for Single-Unit Approval under the following conditions:

• The individual condominium unit is located in a completed project that is not approved;
• For condominium projects with 10 or more units, no more than 10 percent of individual condo units can be FHA-insured; and projects with fewer than 10 units may have no more than two FHA-insured units.
• FHA will require that approved condominium projects have a minimum of 50 percent of the units occupied by owners for most projects
• FHA will require that the commercial/non-residential space within an approved condominium project not exceed 35 percent of the project’s total floor area

According to the FHA: “The vast majority (84 percent) of FHA-insured condo buyers have never owned a home before. While there are more than 150,000 condominium projects in the U.S., only 6.5 percent are approved to participate in FHA’s mortgage insurance programs.  As a result of FHA’s new policy, it is estimated that 20,000 to 60,000 condominium units could become eligible for FHA-insured financing annually.”

Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®

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