Mortgage News and Notes

FHA Substantially Expands Condo Financing Eligibility

October 31st, 2019 9:59 PM by Steven Hofberg

Over the past five years, condominiums have surged in both popularity and value. There are a number of reasons for this, but certainly millennial lifestyle choices and affordability (when compared to single family homes) are major factors. This affordability means that condos are popular for first-time homebuyers. But after the financial crisis, FHA stopped accepting “spot” condo approvals, meaning that the entire project, not just the unit being financed, had to have FHA approval. Since very few condo projects took the time and considerable expense of getting full approval, the use of FHA financing for condo purchases has been severely limited for the past decade.

However, that has recently changed. Effective October 15, FHA is again accepting individual condo unit approvals. Although not every condo unit will be approved, this change will substantially increase the number of units that can be financed through FHA. Not all lenders are yet participating with FHA in the spot approval program, but RMC is fortunate to be working with one lender that is participating.

We feel that this is a game changer for condo purchases, especially for first-time homebuyers and those with limited down payment resources. Like any mortgage program, there are lots of details. Contact Margie for further information on this exciting change.

 

Steven H Hofberg

Operations Manager

Posted by Steven Hofberg on October 31st, 2019 9:59 PM

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