May 25th, 2012
The U.S. Federal Housing Administration may be on the verge of changing mortgage rules that would make it easier for buyers to get for condominiums, according to The Washington Post.
Continued affordability for condominiums and other properties may make global relocation easier for companies and their employees because of the currently low mortgage rates. However, lending issues have been the major hurdle.
As FHA regulations currently stand, buyers cannot purchase a condominium unless the entire complex has been approved for financing. With FHA loans making up a significant portion of the market, properties which don’t meet the agency’s requirements struggle to find buyers.
Some of the specific issues with the regulations include a requirement that less than half of the units on a property are occupied by someone other than the owner, the news source explained. In addition, if there are 30-day delinquencies for condo fees on approximately 15 percent or more of the units, the project would not be approved.
The FHA plans to edit these rules in the near future, which could help relax restrictions and make it easier for financing to be obtained, the news source added. However, it is not known whether this will be enough to change the minds of condominium boards to increase applications for FHA loan approval.