The Federal Housing Administration indicated this week that it is in the process of evaluating changes to its condo lending requirements, according to a statement provided to Housing Wire.
“While we are evaluating potential changes to our condo requirements and expect to announce some of those soon, we cannot yet comment on specific requirements that may be included in any potential changes,” a HUD spokesman told Housing Wire in a statement on Monday.
FHA’s condo requirements currently specify that there may not be any new loans in condo developments with more than 15% of the units being more than 30 days delinquent on condo association fees unless the building meets additional criteria. Another rule specifies that in order for FHA to insure a condo loan, more than half of the units in its building must be owner-occupied for buildings built a year ago, with a single investor not owning more than 10% of the units.
Trade groups have urged FHA to reconsider its guidelines regarding condo units, especially in light of the economic downturn. The Community Associations Institute, the President of the Institute of Real Estate Management, National Association of Home Builders, and National Association of REALTORS® jointly wrote a letter to the U.S. Department of Housing and Development suggesting several “enhancements” to FHA’s condominium requirements last year.
FHA has not indicated when it will make announcements regarding upcoming changes.
Written by Elizabeth EckerPrint Article