In yet another government attempt to spur the housing industry, the FHA is relaxing some of the rules that have kept many borrowers from purchasing condominiums in the past. With condos suffering as much or more than single family detached homes, the FHA is doing its part to help.
Many builders have been caught in the "over-built" trap. Starting condo projects in 2004 - 2005 that were completed just about the time the market started to collapse in 2006. Of course, there are also a large number of condos up for resale. But, when it comes to new condos, some FHA rules have really made it difficult to move them in the past. One survey puts the current inventory of new unsold condos at four times historic levels. But, some help is in place. Here are the important recent FHA rule changes:
- Some of the qualifying requirements are being loosened, making lower credit scores eligible.
- Sold condo percentages have been relaxed. In the past, if 50% of units were unsold, you couldn't get an FHA loan. Now, up to 70% of a condo project can be unsold and a buyer can qualify for an FHA loan.
- In the past, only 30% of the condos in a development could have FHA loans. Now, up to 50% can be financed with FHA guarantees.
One estimate is that this will increase FHA condo loans by 10% in volume. But, if you've been frozen out of a loan for a condo you wanted, it could be a 100% solution for you.
Contact Casey Moseman to discuss your
FHA Purchase Opportunities