FHA condo financing change
New FHA loan guidelines went into place Monday to make it easier to obtain financing on some condominiums. The biggest change is a reduction in the number of units that must be owner-occupied for the condo to qualify for FHA backed loans. Without the FHA backing, borrowers typically have to put down 20% for financing. With the FHA backing down payments can be as low as 3 ½ percent.
The FHA financing requirement was that 51 percent of the units in a condo building be owner occupied. That has been changed to 50% but bank-owned, tenant occupied and vacant units are not counted in the total number of units figure. The FHA requirement change also removed the ban on loans to buildings with “first right of refusal”. The change is scheduled to expire in December of 2010 but should be enough time to boost the condo sales market which offers the most affordable units to potential owners.
A note: Florida, unlike other states, cannot independently approve FHA mortgages. Florida projects must still submit applications to the U.S. Department of Housing and Urban Development which will delay the approval process for condos in the state of Florida.
If you have any questions on FHA backed loans or financing in general please call the Rent 1 Sale 1 Realty office nearest you.
Kathy Krailler - Home Owning and Financing Specialist
West Palm Beach Office
561-383-9100, 877-471-7620
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