Thinking of buying a Condo? Do you need an FHA Condo loan?
In accordance with the passage of the Housing and Economic Recovery Act of 2008 (HERA), the Federal Housing Administration (FHA) is implementing a new approval process for condominium projects and insurance requirements for mortgages on individual units, as authorized under Section 203(b) of the National Housing Act.
FHA will now allow lenders to determine project eligibility, review project documentation, and certify to compliance with Section 203(b) of the NHA and 24 CFR 203 of FHA’s regulations. FHA will continue to maintain a list of approved condominium projects.
Lenders will be required to retain all the project legal documents, contracts, conveyances, plats, plans, insurance coverage, presale and owner occupancy conditions and other documentation in connection with their review and approval of the condominium project.
The following documentation is required for Condo Project Approval:
Guidelines regarding the condo development must be met.
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Condo not FHA Approved?
Condo Loans are similar to loans for individual houses. Down payment requirements, credit, income and assets are the same. FHA only requires that 50% or more of the units be owner occupied.
FHA announced a policy change to address risk and strengthen finances. FHA changed the minimum credit scores for new borrowers:
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