Wednesday, November 11, 2009

FHA Temporarily Relaxes Condo Rules

by Bill McBride on 11/11/2009 11:23:00 AM

Last week the FHA released a temporary guidance that relaxed some of the rules for condominiums. From the FHA: Temporary Guidance for Condominium Policy

The Miami Herald has the key points: FHA moves to boost condo market

• Increase from 30 percent to 50 percent the number of units in a project that can be financed with FHA loans. FHA, however, will make exceptions, even allowing up to 100 percent, when buildings meet an additional set of more stringent criteria.

• Require at least 50 percent of units in a complex to be owner-occupied or sold to owners who plan to live in the units. Bank-owned units may be disqualified from the percentage calculation.

• Reduce a presale requirement in new construction to 30 percent, compared with 70 percent for loans from conventional lenders.
This temporary guidance is in effect from December 7, 2009 through December 31, 2010.

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