Effective Oct. 15, the Federal Housing Administration (FHA) published a new condominium approval process to help credit-worthy first-time buyers attain affordable and sustainable homeownership.
The new rule now will allow certain individual condominium units to obtain FHA mortgage insurance, even if the condo project is not FHA approved, the FHA said in a release.
The new FHA guidelines will lead to increased eligibility of condo units that may be financed by credit-worthy borrowers. The new FHA rule should substantially help eligible borrowers including first-time homebuyers, as well as seniors who may be looking to downsize, the agency said.
In the new Condominium Project Approval section of the Single Family Housing Policy Handbook, you can find the detailed revision and changes to the FHA condominium project approval policy, according to the FHA.
However, the main points of the FHA’s new rule include the following:
- A new single-unit approval process will now make it easier for individual condominium units to be eligible for FHA-insured financing;
- The recertification requirement for approved condominium projects will now be extended from two to three years; and
- More mixed-use projects will now be eligible for FHA insurance.
Based on this new policy, it is estimated that 20,000-60,000 condominium units potentially could become eligible for FHA-insured financing annually.