New Condo Rules Will Open Doors to More Home Ownership
AT LAST! That’s literally what we thought here when we got the news that the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) had published long-awaited condo revisions, which include single unit “spot approval.”
In short, the new policy will allow certain individual condominium units to be eligible for FHA mortgage insurance even if the condominium project itself is not FHA-approved. It will also allow more mixed-use projects to be eligible for FHA insurance and extends the recertification requirement for approved condominium projects from two to three years.
We believe that this will help a wide array of our clients, from younger people looking to make their first housing investment, to retirees intending to downsize. Turns out that nearly 85 percent of FHA-insured condo buyers have never owned a home before so this has the capacity to really move the needle.
And while there are more than 150,000 condominium projects in the U.S., only 6.5 percent are currently approved to participate in FHA’s mortgage insurance programs. This new policy should make between 20,000 and 60,000 condominium units now eligible for FHA-insured financing annually.
We applaud the FHA’s smart, much-needed move to expand the possibility of home investment, helping even more of our neighbors build their wealth. In fact, we feel like this new policy does something we at radius pride ourselves on—and that’s “making mortgages better.” The policies become effective October 15, 2019.
Can we help you with a mortgage on a condo? Let’s get the pre-approval process started…contact us today and one of our friendly loan officers will walk you through everything you need to know.