Yesterday, August 14, 2019, the Federal Housing Administration (FHA) issued significant policy revisions to its condominium approval process. In addition to changes to the condominium project approval policy, the new policy provides a “single-unit approval process” for individual condominium units to be eligible for FHA mortgage insurance, even if the condominium project is not FHA approved. In addition, the new guidelines extend the recertification for approved projects from 2 to 3 years and will allow more mixed-use projects to be eligible for FHA insurance.
are a few more specifics as to changes to FHA’s Single Family Handbook:
As of October 15, FHA will insure mortgages for select condo units in projects
that are not currently approved. An individual unit may be eligible for
Single-Unit Approval so long as the completed project is not approved and for
projects with 10 or more units, no more than 10% of the units can be FHA insured
(for projects with fewer than 10 units, no more than 2 FHA-insured units can be
Owner-Occupancy Requirements. For most projects, approved condominium
projects must have a minimum of 50 percent of units occupied by owners.
- FHA Insurance
Concentration in Condominium Projects. FHA will only insure up to 50% of total
units in an approved project.
Commercial/non-residential space within an approved condominium project may not
exceed 35 percent of total floor area.
The new policies take effect October 15, 2019.
Author: Jim Slaughter
Articles have been Reprinted with permission from Black, Slaughter, Black.
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