I read a story on Housing Wire that our country has over 150k condo projects across the country and only 6.5% of them are approved for FHA financing. Hopefully this will begin to change on October 15th when some new rules from FHA go into effect.
- An individual condo will be eligible for spot approval. This is important for smaller condo communities as communities with 10 units or less will now be able to have 2 units financed by a FHA loan without the community spending the money and time to get FHA’s approval.
- FHA’s recertification period will be extended from 2 years to 3 years. I was hoping for 5 years, but any increase is welcomed.
- FHA will now allow more mixed-use projects as they will allow up to 35% of the square footage to be dedicated to non-residential use. Hopefully this will encourage more construction of condos in our urban area.
- FHA’s owner occupancy requirement is dropping from 51% to 50%.
- FHA will now insure up to 50% of units in any given community.
This is really good news especially for developers who want to build affordable condos in our urban areas as they will be able to combine residential communities with retail and restaurant space that many urbanites love having.