Newsroom
October 26, 2016
FHA lowers condo occupancy threshold
The Federal Housing Administration announced Wednesday it is lowering the condominium owner-occupancy threshold requirement for guaranteed loans from 50 percent to 35 percent, effective immediately.
This will allow more condo buyers to qualify for FHA-insured loans, which will likely increase the number of lower-income and first-time buyers who take advantage of the program.
"While having too few owner-occupants can detract from the viability of a project, requiring too many can harm its marketability," the FHA said. "It is FHA's position that owner-occupants serve to stabilize the financial viability of the projects and are less likely to default on their obligations to homeowner associations than non-owner occupants."
In September, the FHA proposed relaxed restrictions for agency-backed condo loans to streamline the process and boost lending to first-time homebuyers. The comment deadline for the proposal was set for Nov. 28; however, legislation passed in July required the FHA to finalize a new occupancy threshold by the end of October.
This will allow more condo buyers to qualify for FHA-insured loans, which will likely increase the number of lower-income and first-time buyers who take advantage of the program.
"While having too few owner-occupants can detract from the viability of a project, requiring too many can harm its marketability," the FHA said. "It is FHA's position that owner-occupants serve to stabilize the financial viability of the projects and are less likely to default on their obligations to homeowner associations than non-owner occupants."
In September, the FHA proposed relaxed restrictions for agency-backed condo loans to streamline the process and boost lending to first-time homebuyers. The comment deadline for the proposal was set for Nov. 28; however, legislation passed in July required the FHA to finalize a new occupancy threshold by the end of October.
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