The Federal Housing Administration (FHA) has a process that pre-approves condominium projects so loans are easier to procure. In the past, most resort condominiums have been unable to receive approval. But a recent update to the FHA regulations may change this unfriendly trend.
Prior regulations required the condominium to have 50% of the units as owner-occupied. Considering that most local community associations are second homes or investment communities, this number was difficult to reach. Now, the number has been lowered to 35% of units being owner-occupied for FHA approval. This could allow several communities to apply for financing through the FHA.
A quick glance at the other FHA changes:
| Prior Requirement | Current Requirement |
| FHA approval granted for 2 years | FHA approval granted for 3 years |
| Owner occupancy must be at 50% | Owner occupancy must be at 35% |
| Commercial space was not allowed | Commercial space up to 45% will be considered |
| Public comment on changes not available | 30 day public comment |
| Entire project must be approved | Single units could be approved |
Condominium living is becoming more and more popular and these new FHA guidelines will allow more Americans to purchase condominium-style homes. For details about the new approval rules, check out this update from Community Association Institute.
