Important Update to FHA Condo Rules

On October 15^th the Federal Housing Administration issued a long awaited update to its condo rules. The updated rule now allows individual unit approval for FHA financing. The old condo rules required FHA approval for the whole condominium instead of individual units.

These new FHA condo rules are huge for first-time buyers and other buyers who want to own a condo! Before these condo rules were changed, purchasing a condo was basically impossible unless you were coughing up at least 20% down payment or purchasing cash. Condominium associations require 20% - 25% down payment unless they are approved for FHA financing. Unfortunately, only 6.5% of condominiums throughout the country are approved for FHA financing. This leaves a lot of buyers unable to purchase a condo even though they can afford the mortgage payments. The FHA’s goal is to loosen up condo approval guidelines so more first-time home buyers and small families can afford buying a condo.

“Under the revised guidelines an individual condo unit in a building of 10 units or more may be eligible for spot approval if no more than 10% of the units are FHA-insured. For units in buildings with fewer than 10 units, no more than two units can have FHA insurance.” – Housing Wire, Jessica Guerin

Many potential buyers don’t know that they qualify for a FHA mortgage. Below are a few basic requirements to qualify for a FHA loan.

-          Credit score minimum 580

-          Down payment as little as 3.5%

-          2 year employment and income history (pay stubs, tax returns, and W2’s or 1099’s)

-          Debt to Income ratio requirement varies on credit scores

-          3 year waiting period if you foreclosed on a property

For more information on this new opportunity to buy a condo please fill in the form above or reach out to me via phone or email.

P: (954) 829-6073

E: Herson@Bridgestonere.com