The Federal Housing Administration has announced changes to its’ condo approval policies that could make it easi
The changes are intended to increase lender flexibility and to adapt to changing conditions in the housing market.
The FHA and HUD issued a press release on the new rules which states that the new rules …
Under the old rules, a condo project had to be on the FHA approved list or added to it. As of October 15, 2019, the new FHA policies will, according to the FHA official site, include the following changes to FHA condo loan rules.
- A new single-unit approval process “to make it easier for individual condominium units to be eligible for FHA-insured financing”;
- An extended requirement for recertification of approved condominium projects from two to three years;
- A more flexible standard for mixed-use projects to be considered for FHA insurance.
“Today we are making certain FHA responds to what the market is telling us,” says HUD Acting Deputy Secretary and FHA Commissioner Brian Montgomery, who is quoted in an FHA press release.
Montgomery adds, “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.”
According to figures released by the FHA and HUD, a little over 80 percent of FHA loan applicants for
“As a result of FHA’s new policy,” the press release states, between “20,000 to 60,000 condominium units could become eligible for FHA-insured financing annually.”
The new rules take effect, as mentioned above, October 15, 2019. Ask your loan officer if you aren’t sure whether the new rules will apply to your condo loan transaction or not depending on the timing of your mortgage loan application.
We will address the FHA condo loan policies in greater detail in future posts.