The Federal Housing Administration has made it slightly easier to qualify condos for FHA lending, at least in the short term.
Through changes announced in Mortgagee Letter 2012-18, FHA specifies several changes to condo lending requirements that will take effect immediately through August 2014.
“It was determined that certain policy adjustments were needed to address current housing market conditions,” the mortgagee letter states.
Among the changes: no more than 15% of the total units can be more than 60 days past due on association fee payments, a change that applies to all units.
Additionally, at least half of the total units in the project must have been conveyed or be under contract for purchase to owner-occupied residences.
The changes were welcomed by community associations following the announcement.
“This is excellent news for sellers, buyers, condominium communities and the housing market across the country,” said CAI Chief Executive Officer Thomas Skiba. “FHA has responded to the critical issues we’ve raised. By doing so, more Americans can obtain FHA-insured mortgages to purchase condominiums.
Written by Elizabeth Ecker