New Temporary Condo Guidelines
By Anthony Longo 11 11 2009
Condo Guidelines
Last week the FHA released a temporary guidance that relaxed some of the rules for condominiums. From the FHA: Temporary Guidance for Condominium Policy
Here are the key points:
• 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.
I have also heard that FHA is making all condo developments requalify for FHA financing. This may affect my city of Kansas City just like it will affect cities across the country if we have to requalify. The process can sometimes take time that sellers will not want to wait for.