The new FHA condo rule change is great news for first-time urban home buyers. This month the FHA decided to loosen the restrictions for FHA loans for condo buyers. It will now allow more FHA loans in a single project, give more flexibility in owner/occupancy ratios, and more.
Reactions from NVAR
“We are thrilled that Secretary Carson has taken this much-needed step to put the American Dream within reach for thousands of additional families,” said NAR President John Smaby. “…Condominiums are often the most affordable option for first-time homebuyers, small families and those in urban areas. This ruling…will help reverse recent declines in condo sales and ensure the FHA is fulfilling its primary mission to the American people.”
Condos are constantly in demand, not just for first-time home buyers, but for seniors hoping to downsize and stay close to town. This rule change will also help the aging population. Condos are often close to hospitals, grocery stores and other urban conveniences. Seniors value affordability and convenience when they are looking to downsize.
Official Statement from HUD
HUD Acting Deputy Secretary and FHA Commissioner Brian Montgomery added, “Today we are making certain FHA responds to what the market is telling us. This new rule allows FHA to meet its core mission to support eligible borrowers who are ready for homeownership…”
Many (84 percent) FHA-insured condo buyers have never owned a home before. Only 6.5 percent of condominium projects in the U.S. are approved to participate in FHA’s mortgage insurance programs. With the FHA’s new policy, they estimate that 20,000 to 60,000 condominium units could become eligible for FHA-insured financing annually.
What does this mean for me?
If you are a first-time home buyer, or a retiree looking to downsize, things just became much easier. And getting together a down payment is probably easier than you think! A 20% down payment is no longer the standard. For an FHA loan, if you have a good credit score, you can qualify for a 3.5% down payment. And even if your credit is lower, you will only be required to put 10% down. For a free consultation on how the new FHA condo rule change can help you achieve your dreams of home ownership, call Geva and Jane at 571.249.4382 today!
National Association of Realtors® Applauds Long-Awaited FHA Condo Rule – NVAR.com
FHA ISSUES NEW CONDOMINIUM APPROVAL RULE – HUD.gov
FHA changes rules so more first-time condo buyers can get mortgages – LA Times.com
Millennials and Gen Z are Entering the Home Buying Market and it’s easily affordable! – GevaandJane.com