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FHA Updates Condo Approval Rule

Aug 19, 2019 (0) comment

NMP – The Federal Housing Administration (FHA) has published a new rule that updates its condominium approval process. The FHA’s new rule introduces a single-unit approval process designed to make it easier for individual condominium units to become eligible for FHA-insured financing. Eligibility will be extended to an individual condominium unit located in a completed project that is not yet FHA approved. For condominium projects with 10 or more units, no more than 10 percent of individual condo units can be FHA-insured, while projects with fewer than 10 units may have no more than two FHA-insured units. The FHA will require that approved condominium projects have a minimum of 50 percent of the units occupied by owners for most projects, and the agency will only insure up to 50 percent of the total number of units in an approved condominium project. The rule also extends the recertification requirement for approved condominium projects from two to three years, and it allows mixed-use projects with up to 35 percent of commercial space to be eligible for FHA insurance. The policy changes go into effect on Oct.15. “Condominiums have increasingly become a source of affordable, sustainable homeownership for many families and it’s critical that FHA be there to help them,” said U.S. Department of Housing & Urban Development (HUD) Secretary Ben Carson. “Today, we take an important step to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age-in-place.”

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