New rules were announced today that will significantly expand the pool of condos for homebuyers to receive loans from the Federal Housing Administration (FHA).
On Wednesday, the FHA announced rules which will allow individual condo units to be approved for FHA-backed financing rather than restricting eligibility to units in condo buildings which are FHA-approved. With the new rules, the FHA will create an approval process for single units and will also make it possible for mixed-use condo buildings to become FHA-eligible.
Currently, only 6.5 percent of the country's more than 150,000 condo buildings have FHA approval; the new policy is expected to make an additional 20,000-60,000 units eligible. Single units will be eligible for approval if in a non-FHA-approved building, and no more than ten percent of the units in buildings with ten or more units (or no more than two units in a building with fewer than 10 units) can be FHA-approved.
“Today we are making certain FHA responds to what the market is telling us," FHA Commissioner and HUD Acting Deputy Secretary and Brian Montgomery said in a statement. "This new rule allows FHA to meet its core mission to support eligible borrowers who are ready for homeownership and are most likely to enter the market with the purchase of a condominium.”
The policy will take effect October 15, 2019.
This article originally published at http://dc.urbanturf.com/articles/blog/fha-expands-eligibility-for-would-be-condo-buyers/15758
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