Under the old rules, a condo project had to be on the FHA approved list or added to it. As of October 15, 2019, the new FHA policies will, according to the FHA official site, include the following changes to FHA condo loan rules. A new single-unit approval process “to make it easier for individual condominium units to be eligible for FHA-insured financing”; An extended requirement for recertification of approved.
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New Construction also has its own FHA condo approval guidelines. To gain FHA approval for a project that is still under construction, recently converted, or less than 12 months old, a special set of guidelines will apply. The Developer will need to pre-sell, or have under contract, at least 30% of the units in Phase 1 to become FHA Condo Approved.
The first step in the FHA condo approval process is to determine the basic eligibility of the condo based on the prevailing fha condo approval guidelines. A significant amount of knowledge and information is necessary to assess a condo’s eligibility against FHA’s requirements.
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Condominium project approvals will expire two years from the date of placement on the FHA-approved condo list. Every two years the project needs to be re-certified to confirm that it is still in compliance with HUD requirements.
In an effort to promote affordable and sustainable homeownership, especially among credit-worthy first-time buyers, the Federal Housing Administration (FHA) today published a long-awaited final regulation, and policy implementation guidance, which establish a new condominium approval process.
Single unit approval (aka spot approvals): This is probably the most significant change. The return of spot approvals will allow individual buyers, on a case-by-case basis, to purchase a unit with.
· Key elements of the newly released approval process include: single-unit approvals allowed: FHA will insure up to 10% of mortgages in condominiums without FHA approval provided the condominium is financially stable. This is a game-changer for expanding the access to FHA-insured loans for condominium buyers, especially for smaller condominium projects.
Developers may begin the FHA condo approval process when they plan their construction. To get an unfinished condo building FHA-approved, the developer must submit: An application for environment.