VARbuzz: NAR to FHA: Loosen your condo rules
Several dozen members of Congress, led by Reps. Emanuel Cleaver (D-Md.) and Michael Fitzpatrick (R-Pa.) sent a letter to HUD secretary Shaun Donovan, urging that FHA reconsider some of the standards it has set for condos to be certified — and thus allow potential buyers to finance their purchases with FHA loans.
Thousands of condos across the country are no longer FHA certified, making units significantly harder to sell as many buyers can’t get financing.
As we reported before, some of the requirements for certification include
- At least half the units had to be owner-occupied.
- At least 85% of owners had to be current with their condo association fees.
- At least 75% of the total floor space must be residential. (That’s a problem in urban areas, where lower floors often have stores and offices.)
Calling some of the rules “onerous,” the Congressfolk told Donovan
We strongly support the goals of ensuring the ﬁnancial viability of these properties, and averting costs to American taxpayers; but we believe that some of these rules may not be justiﬁed by risk, and may eliminate options for qualiﬁed homebuyers, and further extend our nation’s housing crisis.
Amending the rules for condominium approval … will benefit all parties in the transaction. Condominium associations will become more stable, homeowners will be able to sell their units, homebuyers will have more opportunities to purchase affordable properties, and lenders will be able to move more REO properties off their books.