Once again at the start of this year, we are seeing many cash investor buyers buying low priced condominiums and houses in North San Diego County. The problem is not many condo communities are FHA approved and those that are now face the problem of investor buyers pushing the owner occupied rate below 51%. Consequently, buyers wanting to use the most popular loan in California(FHA) find their selection of low priced housing is even more limited.
So why do Fannie and Freddie require 51% owner occupancy in a community? Do they think it will not be as well maintained because of a high number of renters? I would say the HOA(homeowners association) is probably the one controlling the community's care moreso than a renter who really only affects the interior of a unit. It is up to the HOA to enforce rules to preserve the neighborhood regardless of the type of resident.
Maybe Fannie and Freddie should be more concerned by one individual owning more than a significant number of units in a single complex. If the mutiple unit owner should stop paying dues, it could have a direct affect on the HOA bottom line which is more likely to eventually lead to a decline in the community's appearance.
So I say lower the owner occupancy requirement. Then more FHA buyers can have a chance to purchase and by doing so, it would help raise the owner occupancy rate which they consider to be so important. Otherwise many of these condo communities will never get FHA approved again.
What do you think?
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