Since the DMV is home to many condominium complexes, this new FHA policy will have a direct impact for homebuyers / investors here.
FHA’s new condominium policy is part of a broader federal administration objective to reduce regulatory barriers that currently restrict affordable homeownership opportunities. What exactly is changing? FHA’s new rule is outlined here:
- Introduces a new single-unit approval process to make it easier for individual condominium units to be eligible for FHA-insured financing;
- Extends the recertification requirement for approved condominium projects from 2 to 3 years;
- Allows more mixed-use projects to be eligible for FHA insurance.
- The current owner-occupancy requirement is 50 percent. For properties that are 1+ year old, HUD may approve an owner-occupancy level as low as 35%.
“Condominiums have increasingly become a source of affordable, sustainable homeownership for many families and it’s critical that FHA be there to help them,” said U.S. Housing and Urban Development Secretary Ben Carson. “Today, we take an important step to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age-in-place.”
The National Association of Realtors (NAR) has long been advocating for more lax regulations in this space.
“It goes without saying that condominiums are often the most affordable option for first-time homebuyers, small families and those in urban areas,” said NAR President John Smaby. “This ruling, which culminates years of collaboration between HUD and NAR, will help reverse recent declines in condo sales and ensure the FHA is fulfilling its primary mission to the American people.”