FHA Revises Condo Requirements
FHA loans are one of the strongest financing options for first-time buyers, and condominiums are one of the most affordable and easily maintained property options—but FHA-backed condo loans have not always been an easily accessible mortgage solution. However, with new FHA updates from the Department of Housing and Urban Development (HUD), the condo approval process is about to change in a lot of ways.
Under previous FHA guidelines, condo certifications only lasted for two years before developers or project owners required re-certification. Fortunately, the FHA will extend the condo certification window another year, giving project owners a three-year period before requiring re-certification. And when reapplying, developers will no longer have to resubmit a complete application; they’ll just need to upload the amended information.
According to the current FHA regulations, buyers are ineligible to obtain a single-unit FHA loan if the entire complex isn’t already FHA approved. With the new FHA amendments, spot approvals allow the FHA to approve single condo units within a community; however, the amount of units eligible for FHA insurance varies depending on the total units in the complex. For example, in unapproved projects with over 10 units, no more than 10% of units are eligible for an FHA loan. And in unapproved complexes with under 10 units, no more than two units are eligible for an FHA loan.
The new FHA guidelines are opening up a lot of incredible homeownership opportunities for first-time buyers, allowing them to easily finance in mixed-use developments and complexes with lower owner/occupant ratios. And now that more condo units will have the opportunity for approval, HUD projects that more condo projects will start appearing in development.
Starting mid-October, condo financing may be more affordable and more available to countless buyers, which means now is the best time to get approved. If you want a head start on the condo market competition, partner with the mortgage professionals at Butler Mortgage. We can guide you through the approval process or help you find another financing option that best suits your situation. To learn more about the new FHA amendments or to find a different mortgage solution, complete our free consultation form or call 407-931-3800.
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