FHA may reinstate spot approvals for individual condo units

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SAN FRANCISCO — Approximately 60 percent of condo projects seeking approval as FHA-eligible in 2013 were denied, up from 20 percent in 2011.

The top reasons for FHA projects being denied approval include financial instability, pending litigation, insufficient insurance coverage, and outdated or missing documentation, said Joanne Kuczma, housing program officer in the Office of Single Family Program Development at the Department of Housing and Urban Development.

“The goal isn’t to reduce FHA’s footprint in the condo market, but to ensure that homeowners are buying into a viable, sustainable homeownership opportunity,” Kuczma said today during a panel discussion at the National Association of Realtors’ annual conference. She said HUD is working to improve the approval process and considering changes such as reinstating spot approvals for individual condo units in projects that aren’t already FHA approved. Source: realtor.org