Tag Archives: condos

FHA Issues Rule to Include Approval of Individual Units in Non-Approved Condo Projects

FHA responds to the market

By Jeff Sorg, OnlineEd Blog

(August 22, 2019)

To promote homeownership, especially among credit-worthy first-time buyers, the Federal Housing Administration (FHA) published its long-awaited final regulation, and policy implementation guidance, which establish a new condominium approval process. That provides for comprehensive revision to FHA condominium project approval policy. The new policy will allow specific individual condominium units to be eligible for FHA mortgage insurance even if the condominium project is not FHA approved. The polices become effective on October 15, 2019.

FHA’s new rule introduces a new single-unit approval process to make it easier for individual condominium units to be eligible for FHA-insured financing; extends the recertification requirement for approved condominium projects from two to three years; allows more mixed-use projects to be eligible for FHA insurance.

“Condominiums have increasingly become a source of affordable, sustainable homeownership for many families and it’s critical that FHA be there to help them,” said U.S. Housing and Urban Development Secretary Ben Carson. “Today, we take an important step to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age-in-place.”

HUD Acting Deputy Secretary and FHA Commissioner Brian Montgomery added, “Today we are making certain FHA responds to what the market is telling us. This new rule allows FHA to meet its core mission to support eligible borrowers who are ready for homeownership and are most likely to enter the market with the purchase of a condominium.”

The vast majority (84 percent) of FHA-insured condo buyers have never owned a home before. While there are more than 150,000 condominium projects in the U.S., only 6.5 percent are approved to participate in FHA’s mortgage insurance programs.  As a result of FHA’s new policy, it is estimated that 20,000 to 60,000 condominium units could become eligible for FHA-insured financing annually.

Read FHA’s new condominium approval regulation.

 

 

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Condo Appreciation Outpaces Single-Family Homes

Limited inventory of  homes, popularity of urban life cause runaway condo appreciation

By Jeff Sorg, OnlineEd Blog

housing graph 3(October 27, 2015) –   Condos are appreciating at a rate of 5.1 percent, compared to the 3.7 percent appreciation among single-family homes. Condos are appreciating faster than single-family homes where job markets are thriving or urban renewal is underway, according to the third quarter Zillow® September Real Estate Market Report[i].

According to Zillow, during the Great Recession the typical single-family home lost 20 percent of value; from peak to bottom, the typical condo lost 33.2 percent of its value. In September, according to Zillow’s data, condos are appreciating faster than single-family homes in nearly two-thirds of the top 35 most populated housing markets.

“The housing bust hit condo values hard, and over the past few years, buying a condo wasn’t always considered a good investment compared to a single family home,” said Zillow Chief Economist Dr. Svenja Gudell. “But that’s changing, and condos increasingly represent a strong-performing, often affordable choice, particularly for first-time buyers interested both in homeownership and in keeping a lower-maintenance, city lifestyle.”

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

 All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained by third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.