FHA Condo changes could help struggling Tucson buyers and sellers.


 

By Joseph Small

FHA Condo Loan in Tucson. The FHA is considering changes to its overly-strict and controversial condominium rules that have pretty much left large number of condos ineligible for FHA low-down payment financing . This is some welcome news for condo owners and buyers in the Tucson and Phoenix areas.

Although FHA officials are staying quiet on the specifics, the revisions are expected to remove some of the obstacles that have HOA boards from seeking FHA approval or recertification of their buildings for FHA loans over the past two years. Under FHA regulations, individual condominium units in a building cannot be sold to buyers that want to use the low-down FHA home loan mortgage unless the entire property (all the units) has been certified or approved o do FHA financing.

Currently, the FHA requires that no more than half or 50% of the units in a condo project or building be non-owner occupied. This has been a tough obstacle for buyers to overcome, as well as for sellers. Cash-buying investors often purchase condos for rentals, so you can see the problem that sellers and buyers would face.

Another issue is when the FHA refuses to approve a project where more than 15% of the units are 30 days or more behind on their payments to the condo association. Given the current economic environment, you could see how some would be behind in their association dues.

The Federal Housing Association is expected to clarify the personal liability language and make other modifications in its forthcoming rules. Now whether these upcoming changes will be enough to convince condo association boards to re-apply for approvals is uncertain. But whatever the FHA decides to loosen on the current condo restrictions, it will be much welcome.


– Joseph Small and Team at Guild Mortgage Company is Tucson’s VA, FHA and HARP home loan mortgage experts! Give them a call if you have any mortgage related questions.
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One Response to “FHA Condo changes could help struggling Tucson buyers and sellers.”

  1. Fha Loan to value restrictions for refinance transactions | Free FHA Loan Advice | Streamline Refinance Says:

    […] right now and they are needed to revive our slumping housing market and our slumping economy.FHA has lowered the cash out refinance Loan to value from 95% down to 85% as of April 1st.ta/Local/Temp/moz-screenshot.jpg" alt="" />WE knew it was coming for sometime and it finally […]

     

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