Condo Rule Opens Door to Homeownership

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As you may know, I handle a considerable amount of condominium sales in the Philadelphia suburbs, there are plenty of condominiums that are affordable in the greater Philadelphia region however financing at times can hinder the qualifications of people with the required income to qualify  but lack the required down payment, and may need assistance from family members  therefore relying on FHA financing, the issue was not may buildings were approved, well as of August 2019 HUD has changed the guidelines for FHA financing, no longer does the entire complex need approval HUD will now allow a single unit approval and they have lessened the restriction that has deterred government financing in the past. See the outline below from the Nation Association of REALTORS white paper on this needed change.

On August 14, 2019, the U.S. Department of Housing and Urban Development (HUD) released the long-awaited final rule on project approval for single-family condominiums insured by the Federal Housing Administration (FHA). For many years, NAR urged HUD to finalize changes to the previous rule that would ease restrictions on FHA financing for condominiums, thus enabling more first-time buyers, older adults, and low to moderate-income families to achieve the dream of homeownership.

Single Unit Approval
Following the aftermath of the Great Recession, HUD suspended the ability of FHA borrowers to obtain financing for a condominium purchase in a non-FHA approved property, what was often referred to as “spot loans.” This greatly reduced the available supply of condominiums to FHA borrowers. Under the new rule, FHA borrowers can obtain Single Unit Approval (SUA) on non-FHA approved condominium properties that meet the following requirements: at least five units; a limited concentration of FHA-insured units; at least 50 percent owner-occupancy; and a maximum of 35 percent commercial space. The return of SUA will increase existing supply and offer many more affordable home ownership opportunities for FHA borrowers.

For more information please feel free to contact me Mark Sweeney, REALTOR at 610-247-3339. Please click this link to my preferred lender Joe Gonzalez of Cross Country Mortgage for the benefits of FHA financing as a borrower or to strat the process for an FHA loan pre-approval.