Many home buyers are confused when it comes to selecting the right condo to purchase. Just when they think they've found the right complex, they learn the complex isn't FHA approved.
New rules regarding this were implemented in February 2010. New regulations require the entire complex to be FHA approved before an FHA loan can be obtained for any unit in the complex (previously, it was possible to get an exception for just one unit).
The following is a list of requirements that must be met by a condominium complex seeking FHA approval:
1. Not more than 25% of the property's total floor area can be used for commercial purposes.
2. No more than 10 percent of the units in the complex can be owned by one investor.
3. No more than 15% of the total units can be behind on their association payments.
4. At least 50% of the total units must be sold prior to endorsement (new construction).
5. At least 50% of the units must be owner occupied (not rented out).
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