“FHA Eases Condo Requirements, to Help Boost Sales!”
What welcome news! Over the last few years there have been many restrictions that have prohibited condo sales for so many. It’s about time these decisions were made and many more should be added.
All these restrictions have hurt the value of condominiums in this country. Many of these restrictions have supposedly been put on for the best interest of the consumer. The problem, I have no clue as to what they are trying to protect the consumer from.
Many condo owners have wanted to sell their unit and couldn’t, many prospective homeowners wanted to buy these units and couldn’t get financing. Again, how does this help or is in the best interest of the consumer?
Unfortunately, over restrictions have hurt real estate sales and values in the name of protecting the consumer.
September 14, 2012 George Gombossy
”The Federal Housing Administration is temporarily easing its lending requirements for condominiums, in a bid to help the battered housing market,” The Chicago Tribune is reporting.
“It was determined that certain policy adjustments were needed to address current housing market conditions,” the FHA said in a letter to mortgage lenders Thursday.
“The key changes, which will stay in place for almost two years, include easing the requirements regarding the number of units in a building that can be delinquent on their association dues. Going forward, no more than 15 percent of a building’s units can be more than 60 days delinquent. The previous rule was 30 days.,” according to the story written by Mary Ellen Podmolik .
“Investors may own up to 50 percent of the total units in an existing building or non-gut rehab project so long as at least half of the units have been sold or are under contract to owner-occupants for use as their principal homes. Unoccupied and unsold units owned by a developer will not be considered investor-owned and subject to the requirements unless the condominium is rented or has had a previous occupant.”
“It was determined that certain policy adjustments were needed to address current housing market conditions,” the FHA said in the letter.
CAI Chief Executive Officer Thomas Skiba said the revisions were needed sooner but is still “excellent news.”
“FHA has responded to the critical issues we’ve raised. By doing so, more Americans can obtain FHA-insured mortgages to purchase condominiums,” Skiba said. “This will spark home sales and help tens of thousands of condominium communities begin to recover from the housing slump, and that can only help the national economy.”
“This is excellent news for sellers, buyers, condominium communities and the housing market across the country,” said Thomas Skiba, the association’s CEO, said in a statement. “We hoped this would happen a lot sooner, but it’s an important step in the right direction. This will spark home sales and help tens of thousands of condominium communities begin to recover from the housing slump, and that can only help the national economy.”
Until Feb. 1, 2010, condo buyers could seek spot approval for FHA-backed mortgages, which require smaller down payments than other mortgage products and thus are considered a good option for first-time homebuyers. But the agency changed its criteria, requiring entire buildings to be certified and based its approval process on a building’s financial viability. Buildings are recertified every two years.
That has caused problems for potential buyers and sellers, as condo association’s financial reserves dwindled, homeowners lost their units through short sales and foreclosures, and the number of rentals in buildings rose.
image: graur codrin/freedigitalphotos.net