Feds Proposing To Allow More FHA Loans To Complexes That Aren’t FHA Certified

FHA loans and FHA approvals is a very big topic among Associations and unit owners, so I made some assumptions as to familiarity of unit owners.  I deal with the issue fairly regularly with unit owners and associations.

It is pretty well-accepted  that Condo Approval by FHA Helps Residents Sell Their Units  because more first time buyers can get mortgages.

The proposed regulations are supposed to make FHA mortgages available to more condo owners.  The FHA insures mortgages so that the buyer can make a lower down payments, sometimes as low as 3.5% of the purchase price.  A conventional down payment is 20% of the purchase price.

At present, communities have to be certified by FHA to have FHA loans for their unit owners.  It is a lengthy and difficult process and condos can spend several thousand dollars just get certified.  Some find the certification process too expensive or difficult and don’t bother.  he proposed regulations will do away with the certification requirement, in some cases, and let the banks decide whether to make the loans on a case by case basis, that is, “spot approvals.”

For those communities that do have FHA certification, the certification will last longer and the renewal of certification will be much easier.

If mortgages are easier to get, then there will be more buyers who can buy condo units, especially first time buyers.  More buyers = higher prices and more marketable units.

Congress told FHA to make consumer-friendly Federal Housing Administration mortgages more widely available in condominiums.  These are the proposed regulation published in the Federal Register.  Interested people can comment until 11/3.  Then, the regulations may or may not be revised before the regulations are adopted.  This is one of the final steps in the federal regulation adoption process.  The public comment phase means the regulations are almost ready.

The idea is to make FHA loans more available to prospective condo owners.

The million-member National Association of Realtors  hailed FHA’s policy switch as “a big win.”  CAI is reviewing and submitting suggestions.

Anybody, including unit owners, can read the proposed regulations and submit suggestions.  People should  be watching what happens to the regulations.

Here is a link to a 2012 article that you wrote on FHA mortgages that explains certification and the problems.


Here is an article from the Hartford Courant concerning the problems with the old FHA requirements.


Here is an article on FHA certification from CTCondoNews by Ed Kowal






3 Responses to Feds Proposing To Allow More FHA Loans To Complexes That Aren’t FHA Certified

  1. James Tupko says:

    Does HR3700 reduce the percentage of unit owners
    required to 35%

  2. Concerned CT Condo Owner says:

    Why haven’t CCOC members heard from the new CCOC president? Why hasn’t the entire CCOC membership been surveyed about legislative priorities or member meetings?

  3. khanh says:

    how does FHA loan help it doesnt for example when you buy a house for 165,000 the seller expect that much but when asking the seller to pay for the closing cost most seller refuse the offer or has a higher offer then how would FHA loan help us first time buyer. why don’t FHA loan pay for the closing cost so that us first time buy easy get a home.i have look for a house over two mth the house i like to get either refuse my offer because of telling them to pay for the closing cost. FHA suppose to help me get in the house i like but, it end it made it hard for me to get a house it because i don’t have the lot money for down payment and telling the seller to pay for my closing cost is like lowing the prices they ask for. So tell me how does this FHA loan is suppose to help me?

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