FHA Condo Approval Changes

FHA changes for condominiums

Communities that are on the FHA approved list have a higher market appeal due to a larger pool of Buyers who seek favorable FHA Insured financing which typically carries lower interest rates and lower down payment requirements. On October 26th, 2016 FHA released a letter stating that they are lowering the owner occupancy rate from 50% to 35% as long as the reserve account is funded at an amount of 20% or more of the budget.  

This is a significant revision to their policy as many communities have a high rental rate in the community and have not been eligible for FHA approval for many years. We suggest looking into this if your community is one of those that may not yet but approved but meet these new requirements. The letter can be found here:  FHA Mortgagee Letter - New Condo Approval Requirements