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FHA and New Homes- The 50% rule in a new community

This weekend I had a new experience. I have a buyer that has been approved for an FHA loan. We are looking at condos and were wanting to look at and in one case, even purchase at a new community. However, I found out that if the community is not more than 50% sold, a buyer can not use an FHA loan to purchase. Apparently FHA does not approve a new community until it surpasses that point.

Has anyone else had any experience with this? I was shocked, especially since nearly all of my first time buyers this year are using FHA.

Jamie Parker

Snellville Realtor

Atlanta Homes

Posted by Jamie Parker Snellville Realtor, Gwinnett Realtor on 05/26/2008 09:52 PM

Comments (4)

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4 Comments on FHA and New Homes- The 50% rule in a new community

Wow, I didn't know that. Thanks for the information. We are, too, seeing alot of FHA loans these days.

05/26/2008 09:59 PM

by Hope Goss (Ventura Property Shoppe)

Thanks for the information. I didn't know that. I hope your buyers fall in love with something else!!!

05/26/2008 10:08 PM

by Melody Botting Real Estate Network

Interesting observation. Now that we are using FHA more often this is good information.

05/28/2008 08:17 AM

by Tracy Santrock-Cary NC Real Estate Blog (Fonville Morisey)

I think that rule applys to condo's only, not to single family residences, but check wth your lender for clarification. I just closed on a condo where that was an issue, but the lender was able to get around that rule and get it closed.

05/31/2008 02:43 AM

by Michael Veri (Realty Executives Ocala)

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