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Industry groups hold out hope FHA will ease condo rules

Legal worries led to mass exodus of condo associations from program

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

Good news: FHA is working on revised condominium regulations. It's mum about the details and timing, but John Anderson, a broker with Twin Oaks Realty in Minneapolis-St Paul, Minnesota, has some blunt recommendations to help FHA get its revisions right:Chuck the current blanket 50 percent owner-occupancy requirement. It's stricter than Fannie Mae and Freddie Mac's standards and it unfairly prevents condo unit sales to credit-worthy buyers simply because the project as a whole doesn't qualify.Soften up on the project certification rules. They are still "scaring away condo boards" from seeking certification and thus closing the doors to FHA-financed purchasers.Dump the current "concentration" limit of 50 percent that prohibits FHA insured loans on units if FHA financing already covers more than half of the units in the project.Relax the requirement that no more than 15 percent of the total units in a project can be 60 days late on homeowner association fees. Kick tha...