Realtors are pushing condominium boards to rethink their stance on Federal Housing Administration loans, arguing that FHA’s strict lending criteria hurts the mortgage and reverse mortgage markets, says The Washington Post in a recent article.
Realtors, brokers and agents from California unveiled a campaign to convince condo boards to rethink their objections to FHA certification during this month’s spring legislative conference of the National Association of Realtors in Washington.
President of the Orange County Association of Realtors Mike DeLeon tells The Washington Post the campaign’s primary focus “is to show reluctant condo directors ‘the positive benefits’ of certifying with FHA [and] stresses ‘keeping [condo-unit] values at their highest’ by widening the pool of potential purchasers; helping unit owners tap their equity for retirement; and the relatively low risk of default presented by today’s FHA buyers.”
Since toughening its financing rules and requiring certification of entire projects four years ago, the number of condo developments approved for FHA financing has plunged by more than half, reports The Washington Post. As of mid-month, it stood at just 10,020 communities, an FHA spokesman tells The Washington Post; and Industry sources estimate that the total number of condo projects nationwide is around 144,000.
FHA insured reverse-mortgages account for more than 90 percent of all borrowing in that field.
Written by Cassandra Dowell