August 14, 2019, HUD released the newly approved condo rules. The new rules include a new condo approval process.
The new policies become effective October 15, 2019. Included in the new rules are:
- A single unit approval process allowing individual condo units to be eligible for FHA financing
- The re-certification process for approved condo projects is extended to 3 years
- More mixed-use projects will be eligible for FHA financing as long as the nonresidential space/commercial space does not exceed 35% of the project’s total floor area
- A range of 30% to 75% of the units must be owner occupied. The percentage is determined by several factors. Secondary residences occupied by the owner part of the year, but not rented out a majority of the year will count toward the total owner-occupied unit count.
The new rules also lessen the burden on lenders and their staffs to meet experience requirements.
You may want to read the new condo regulation and the changes to the FHA Single Family Handbook so that you can work more effectively with your client and their lender.