It's been difficult selling condominiums in recent years which required FHA financing. The restrictions on FHA borrowers for condo financing essentially put a halt to the sale of many condominium units in the Charlotte metro area. The good news is that recently the FHA has eased up on some of the more onerous restrictions. These include:
- FHA can now approve loans for condominiums in comlexes where up to 50% of their space is for commercial use (up from 25%). This new condo-to-commercial ratio will help mixed use projects reserving retail and restaurant space on ground floors.
- FHA will now allow single investors to buy up to 50% of the units in a complex (up from 10%).
- FHA will now approve loans on condo projects where 15% of the homeowners are 60 days late on their HOA dues (up from 30 days).
- Condo board members now only have to certify that they've made a good-faith effort to verify condo information, as opposed to previously having had to confirm they had no knowledge or circumstances that could adversely affect a building (something hard for volunteer board members to confirm).
The most impactful change has yet to come and might not until the coming year: adjustment to the rule that at least 50% of the condo units be owner-occupied. Let's hope we see daylight on this issue to help increase the number of approved condo complexes in Charlotte metro area.
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