About time HUD loosened things up with regard to Condos so buyers can buy them with FHA financing.
Thus far it’s been a fairly lengthy and tricky process that HOA’s have had to endure to get a Condo project approved and as a result, for many homebuyers, a Condo is not an option if they need FHA financing. Today’s announcement from HUD (that oversees FHA) changes this, making it easier for Condos to be FHA approved.
Here’s a summary of HUD’s announcement today:
Effective immediately, FHA’s temporary guidance will streamline the agency’s condominium recertification process and expand the eligibility of acceptable ‘owner-occupied’ units to include second homes that are not investor-owned. Here’s the full HUD Mortgagee Letter describing revisions
These provisions will expire in one year and serve to revise FHA’s condominium approval process until the agency can implement a more comprehensive condominium rule change. Today’s guidance:
- Modifies the requirements for condominium project recertification;
- Revises the calculation of FHA’s required owner-occupancy percentage; and
- Expands eligible condominium project insurance coverages.
Realtors and Homebuyers: If you are aware of a Condo project that either used to be approved and is no longer, or has never been approved, urge the HOA to get their approval paperwork in. You can see a list of approved Condos (HUD) here.