FHA Proposes Changes on Condo Requirements
The Federal Housing Administration (FHA) has proposed new regulations that will reinstate single unit approvals in unapproved condominium developments and require condo projects to recertify their approval status every three years instead of the current two-year approval cycle.
The FHA also announced it would seek public comment on a proposal to “create a range of thresholds required for FHA approval including the minimum owner-occupants in approved condo developments and limits on commercial/non-residential space.” In a press statement, the agency said that these proposals were designed to “ensure financial soundness and project viability, but in a manner that is more flexible where possible and responsive to the market.”
Among the key provisions of the FHA proposals are a change in the minimum owner-occupancy requirements from 50 units to a range of 25 to 75, a change the requirement on commercial/nonresidential space within an approved condominium development from 50 percent of the project’s total floor area to a range of 25 to 60 percent, and a broadening the FHA’s ability insure mortgages for selected single-unit condominium units in developments that are not currently approved.
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