The US Department of Housing & Urban Development(HUD) has long recognized that sweeping changes were needed to improve stagnant condo sales, and last week they finally announced their reform.
There are over 150,000 condominium projects in the US. However, only roughly 6.5% of these projects have met the standards to be "FHA Approved" projects. This has meant financing challenges for decades on some of the most affordable housing for first time home buyers. As a result of this condominium sales have remained relatively stagnant despite an overall strong housing market.
These changes go into effect starting October 15, 2019, here are a few of the highlights. The full rules can be found on the HUD website
A new single unit approval process for units in non-approved projects. Sometimes referred to as "spot approvals".
FHA approvals now good for 3 years for approved projects. This is up from the previous 2.
The recertification process has been simplified. Now instead of resubmitting all documents, approved projects only need to submit new and updated documentation.
Owner occupancy rates decreased as low as 35% down from previous 50%
Increased allowance of up to 75% of units can be FHA financed.
All of these changes could help make the dream of home ownership for many families whom without FHA type financing a reality.