On Wednesday, the Federal Housing Administration issued new guidelines for condominium project approval. Before the recession, condominium projects could obtain FHA certification, in whole or in part, and that certification did not expire. In 2011, the guidelines were changed to require re-certification every two years, and limited certification to the entire project. Gone were the days of “spot approval.” At the time, it appeared that HUD was no longer interested in backing condominium loans.
The new guidelines bring back spot approval, and now projects only need obtain re-certification every three years. Re-certification has been simplified. In addition, owner occupancy can be as low as 35%. These changes can make it easier for a buyer to obtain an FHA loan, potentially expanding the pool of available buyers for condominiums throughout the country.
The new guidelines go into effect on October 15.