The Federal Housing Administration announced Sept. 13 that it will ease several requirements for the purchase of condominium units through August 2014.
The new guidance is effective for all approvals or reconsiderations submitted for review going forward.
The FHA previously had implemented stricter rules in an effort to protect its emergency insurance fund, which recently has dipped to dangerous levels.
Changes to the rules include the provision that no more than 15 percent of a building’s units can be delinquent by 60 days or more on their condo association fees; previously, FHA imposed a 30-day delinquency cap.
Another change provided more specific guidance on how many units investors can own on properties under construction or being converted into condominiums. Investors can own up to 30 percent of the units on some of the projects in order to qualify for FHA financing. However, for projects completed more than one year ago, the FHA still requires at least half of the units to be owner-occupied.
Additional guidance focused on insurance coverage, commercial space limitations and other details.
“It was determined that certain policy adjustments were needed to address current housing market conditions,” the FHA announced.
Read the complete FHA announcement.