Effective starting on October 15th, 2019, the Federal Housing Administration (FHA) has published a new condominium approval process to help credit-worthy first-time buyers attain affordable and sustainable homeownership. The new rule will now allow certain individual condominium units to obtain FHA mortgage insurance, even if the condo project is not FHA approved.
In the new Condominium Project Approval section of the Single Family Housing Policy Handbook, you can find the detailed revision and changes to the FHA condominium project approval policy. However, the main points of the FHA’s new rule include the following…
- A new single-unit approval process will now make it easier for individual condominium units to be eligible for FHA-insured financing
- The recertification requirement for approved condominium projects will now be extended from two to three years
- More mixed-use projects will now be eligible for FHA insurance
The new FHA rule should substantially help eligible borrowers including first-time homebuyers, as well as seniors who may be looking to downsize. Based on this new policy, it is estimated that 20,000-60,000 condominium units could potentially become eligible for FHA-insured financing annually.