Mortgage

FHA changes to condo policies aim to boost homeownership

New policies streamline recertification process, make it easier to qualify
  • The FHA has changed some of its condo policies in ways that will make it easier for more homebuyers to purchase condos with FHA-backed loans.
  • The changes include redefining "owner occupied," streamlining the recertification process, and allowing more insurance options.
  • The changes are effective immediately.

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SAN DIEGO — The Federal Housing Administration has made changes to its condominium policies that are designed to make homeownership more accessible to first-time homebuyers.

FHA Principal Deputy Assistant Secretary Ed Golding announced the changes on stage at the “NAR 360” session of NAR’s annual conference Thursday.

The three major changes, to be announced in a Mortgagee Letter today, are:

  1. Properties that aren’t strictly investor properties, such as second homes, will now be included in the percentage of units that are owner-occupied. FHA requires that 50 percent of the units in condo buildings be owner occupied in order to qualify for FHA certification.
  2. An expansion of the types of insurance considered acceptable coverage according to FHA rules, including state-run programs and co-insurance, among others.
  3. A dramatically streamlined recertification process.

These changes are in line with changes advocated by NAR, the trade group said in a press release.

Email Andrea V. Brambila.