The Federal Housing Commission has revised the rules that encourage condo associations to get certified or re-certified for financing which allows individual condo owners to low down payment, FHA insured mortgages.
This will open up many more sales for those that can afford to buy condo’s. In the past many people wanted to buy a condo but could not if over 30% of the unit owners were investors. The only way someone could purchase a condo where there were more than 30% investors was to pay ALL cash. This made it difficult for first time homeowners to purchase in such areas. Instead of a 30% rule, it has been changed to 50% must be owned by owner occupants before investors have to pay ALL cash. The new FHA law will help many condominium communities through the difficult housing market. This will spur sales and help rejuvenate sales.
The new law will help condominium associations that have struggled during the down turn. This should significantly reduce the impediments association encountered when seeking FHA approvals. Condo associations welcome the change as they have less legal liability. Breaking FHA penalties in the past meant fines up to $1 million dollars and 30 years in prison.
Less than 10% of condo associations are currently certified so this opens the doors for much growth.