NEWS
Financing rule changes create options for condo buyers
NAR lauds new FHA financing rules that will enable more buyers to obtain low down payment mortgages
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The U.S. Department of Housing and Urban Development has
released updated guidance on FHA-insured condominium financing
that according National Association of REALTORS® will allow more
buyers to obtain low downpayment mortgages on aff ordable housing
options. The guidance will go into eff ect in mid-October.
Specifically, the new rules will:
• Extend FHA certifications on condo developments from two
years to three years, reducing the compliance burden on condo
boards.
• Allow for single-unit mortgage approvals—oft en known as spot
approvals—which will enable FHA insurance of individual condo
units, even if the property does not have FHA approval.
• Secure additional flexibility in the ratio of investors to owner-occupants
allowed for FHA financing in a condo building.
“Condominiums are oft en the most aff ordable option for firsttime
homebuyers, small families, and those in urban areas,” says
NAR President John Smaby. “This ruling, which culminates years
of collaboration between HUD and NAR, will help reverse recent
declines in condo sales and ensure the FHA is fulfilling its primary
mission to the American people.”
(Year-to-date condo sales in the Orlando area are up 3% through
July.)
Since 2008, NAR has championed policy changes in condo
lending. NAR has sought rules that would allow the owner-occupancy
level to be determined on a case-by-case basis and that would
extend the approval period for project certification to five years.
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