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FHA Will Ease Condo Requirements until 2014

September 29, 2012

fha condo regulations changesIn order to better serve the current housing market, the Federal Housing Administration (FHA) is easing some of its condo requirements until August 2014. Here’s a rundown on how the new requirements will affect Chicago real estate:

Requirement #1
No more than 15 percent of a condo’s units can be delinquent for 60 or more days on their association fees. The previous requirements only allowed condo owners to be delinquent for 30
days.

The FHA will restrict financing to condominiums that have at least 50 percent of their units occupied, and will offer no financing for condo developments with more than 15 percent of their units in serious delinquency.

Requirement #2
For units completed more than a year ago, half of the units in a condo development must be owner-occupied.

Requirement #3
Previously, one investor was not permitted to own more than 10 percent of a condo’s units. Now investors can own up to 30 percent of units.

While the passing of these guidelines has caused some opposition and controversy, the FHA has stood by its decision and hopes that the new requirements will enable more Americans to purchase a condo. More Americans purchasing condos means home sales will increase as well, which will boost the overall economy.

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