FHA condo financing has gotten harder for many customers over the past few years.
Luckily some changes announced in September could help.
The National Association of REALTORS(R) broke down the changes:
1) Investors can buy up to half of project units. The maximum before was 10% investor-owned.
2) More commercial space is allowed in a project. The maximum used to be 25%, now it can be up to 50% with specific FHA approval.
3) Board certifications still have tough consequences for misrepresentations, but FHA has realized that many board presidents rely on attorneys and others for information on compliance and rules and regulations. The person signing no longer has to certify that he or she has no knowledge of any circumstances where they would become delinquent.
4) HOA dues delinquencies can be up to 15% of all units — and they can now be delinquent up to 60 days instead of the 30 that was allowed before.
There are still a number of issues that can keep a condo association from obtaining FHA approval, and NAR is working to remedy those issues.
I am hopeful that these interim changes open the door for more changes, and he ability for more people to buy condos using FHA financing. I do feel that the fact that a number of condos who cannot or do not have FHA approval have had their values drop due to these limitations. Let’s hope for more change!