The FHA has recently announced a relaxation in some of its strenuous condominium financing guidelines. Florida condo buyers looking to use a Florida mortgage should pay attention, as FHA financing rules for condos will not stay this relaxed for long.
Among the new temporary rules is a provision that permits FHA mortgage lenders to request spot approvals for condos in buildings that have not been approved for FHA financing. The administration had previously scheduled such spot approvals to cease at the end of the year, but the new deadline is February 2010.
The new FHA condominium guidelines also provide for the following:
Increase the number of units in a development that are permitted to be financed through the FHA from 30 percent to 50 percent. In some cases, the FHA will even make exceptions – allowing up to 100 percent – if condominium buildings meet an additional set of more stringent criteria.
The FHA will also now allow bank-owned condos to be removed from the calculation that requires at least 50 percent of units in a complex to be owner-occupied or sold to owners who plan to live in the units. This is a huge benefit for areas in Florida where condominiums experienced the largest number of foreclosures.
Lastly, these new relaxed FHA guidelines will reduce the now 70 new condo development pre-sale requirement to 30 percent, for loans from conventional lenders.
Though these relaxed FHA condominium guidelines are by no means a collective magic bullet for the housing industry here in Florida, they do provide a little bit of breathing room. As always, if you or a friend of yours is looking to purchase a Florida condominium using an FHA mortgage, please give me a call.