FHA Condo changes
If you’re seeking to buy a condo and looking to put a minimal amount down, then you may be looking to get an FHA loan.
FHA has been more strict on whether they’ll lend in a condominium project in the last several years. But yesterday they eased up on one restriction.
Now, FHA is willing to finance condos with a lower percentage of owner occupants relative to investors. The standard requirement is that more than 50% of the unit owners occupy their units. Now they will reduce that requirement to 35%, if the following also applies:
- The association budgets for at least twenty percent of the condominium fees to be delegated to reserve funds.
- No more than 10% of units are more than 60 days delinquent on their condo fees.
Should the above be true, and all documentation is provided to the Department of Housing and Urban Development, then a lower owner occupancy ratio will be accepted. Approvals from HUD are good for two years.
There are other changes in the work with regard to easing restrictions on condos which haven’t been applied yet. So this may be the first in a series of changes we’ll see that makes financing your condominium an easier process.