Could FHA Condo Loans Become Easier to Get?
The Department of Housing and Urban Development official blog, The HUDdle, recently linked to an article on HousingWire.com that details possible changes to the way FHA condo loans are approved. Those changes could make it easier for some borrowers to get condo loans on projects that were previously ineligible for FHA home loans.
According to the May 22, 2012 HousingWire.com article, FHA may relax condo rules soon, a HUD spokesperson was quoted saying the agency is “evaluating potential changes to our condo requirements and expect to announce some of those soon” but stressed that no comment would be available on specific requirements. But some who watch these issues closely anticipate changes which may include alterations to FHA rules covering the approval process for condo developments.
From the HousingWire.com article:
“…the FHA put rules in place barring new loans on developments with more than 15% of the units more than 30 delinquent on condo association dues. Also, at least half of the units must be owner-occupied for projects built longer than a year ago, and one investor can own no more than 10% of the units.” Could FHA changes include a modification of these guidelines?
HousingWire.com writer Jon Prior seems to think so. In his article, he quotes an agency called Community Associations Institute, which in a letter to association members stated, “Community Associations Institute anticipates FHA will modify its standard on assessment delinquencies to allow flexibility for associations. CAI has argued the existing standard that no more than 15 percent of units may be 30 days past due on assessments is too strict. Many condominiums are immediately disqualified from FHA approval by the current standard…”
At the time of this writing, no official word is available from the FHA or HUD regarding these potential changes, but as developments occur we will report them here.
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