Prior to 2005, few condominium boards paid much attention to FHA financing. At the time, the FHA was only a small fraction of condominium loans (about 5%) and FHA buyers, due to smaller down payment requirements, were considered less committed to their purchased units....
WASHINGTON — Tens of thousands of condominium unit owners around the country may not know it, but their ability to sell or refinance could be jeopardized by a rolling series of federal government deadlines.
On Dec. 8, an estimated 2,200 condominium projects lost eligibility for unit sales or refinancings involving FHA mortgages because they had missed a key deadline for recertification set by the agency. Beginning next spring, another 23,000 projects with residential units totaling into the estimated hundreds of thousands could lose their eligibility as well.
What this means, say lenders and condo experts, is that unsuspecting unit owners nationwide could suddenly be cut off from an increasingly important source of mortgage money. In some markets where FHA accounts for 75 percent or more of first-time home purchases, condo sellers could be severely handicapped. In parts of the country with heavy concentrations of condos, such as California, Florida, New England, Washington, D.C., and the urban Midwest, the impacts could even depress sales prices.