FHA eases rules for condo mortgages

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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®

Sagan Harborside Sotheby’s International Realty
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