FHA Changes Condo Rules

There have been many changes recently regarding the financing of condominiums.  FHA recently announced its newest guidelines for financing condominiums. Realty Times provided the following summary of these rules.

Kenneth R Harney wrote, “On one hand, the rules allow lenders a lot more flexibility in reviewing condo project eligibility and documentation.” He goes on to say, “On the other hand, the agency is imposing a number of restrictions.”

Some of the new rules are as follows:

-Units in Condo hotels, timeshares, houseboats, or any other multiple dwellings inside of one unit are prohibited.

-No more than 25% of the condominium space may be allotted for commercial use.

-No more than 10% of the units may be owned by investors.

-New projects must have more than 50% of the units sold as primary residences.

-There must be fewer than 30% FHA-back loans in the development.

For more information on the new condominium financing rules please contact our office or visit http://www.fha.gov.

For the complete article, click http://realtytimes.com/rtpages/20090629_investorreport.htm

Posted by Karen Gagliardi, Berlin Law Firm, Business Development Coordinator

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