New Condo Policy becomes effective Oct. 15, 2019!
FHA recently finalized its long-awaited new condominium policy and loan approval process, making it easier for more first-time condo buyers to receive mortgages.
Specifically, the new guidance extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project.
Brian Montgomery, the FHA commissioner and acting deputy secretary of the Housing and Urban Development Department, said the changes would make it easier for first-time buyers, retirees and minorities to become homeowners. It’s estimated that 20,000 to 60,000 condominium units could become eligible for FHA-insured financing annually.
NAR was among the first trade associations to applaud the agency for finally making the long-awaited policy changes, which it has championed for more than a decade. “We are thrilled that Secretary Ben Carson has taken this much-needed step to put the American Dream within reach for thousands of additional families,” said NAR President John Smaby.
“It goes without saying that condominiums are often the most affordable option for first-time homebuyers, small families and those in urban areas,” Smaby continued. “This ruling, which culminates years of collaboration between HUD and NAR, will help reverse recent declines in condo sales and ensure the FHA is fulfilling its primary mission to the American people.”
Specific changes regarding condo approvals can be viewed in an updated version of FHA’s Single-Family Handbook, found at HUD.gov.