The following proposed changes were introduced on September 27th and must first go through a 60 day comment period as described below. Watch for updates and changes to these proposals prior to any implementation.
Minimum Owner-Occupancy Requirements
- FHA is asking for comment on an acceptable minimum percentage for owner-occupied condominiums between 25 and 75 percent.
- FHA intends to establish the specific percent by notice prior to October 27th, 2016 in order to comply with directives of HR 3700, Housing Opportunity through Modernization Act of 2016, or the percentage will be set to 35 percent.
Commercial/Nonresidential Space Limits
- FHA is asking for comment on an acceptable minimum percentage for commercial/non-residential space limits between 25 and 60 percent.
- FHA intends to establish the specific percent by notice.
Single-Unit, or Spot, Approvals
FHA proposes to allow single-unit, or spot, loan approval in non-FHA approved condominiums if:
- The individual unit is located in a completed project that has not yet been approved;
- The unit is not a manufactured housing condominium project or located in a two-to-four-unit project;
- The condominium unit is not a manufactured home and is in a project that has at least five dwelling units; and
- The unit is in a project in which the amount of single-unit approvals is no more than 20 percent of the total number of units
- FHA proposes to extend the approval period for a project from 2 to 3 years;
- Re-certification requests may be submitted 6 months prior to no later than six months after the date of expiration; and
- FHA will allow for updating previous information rather than submitting an entire new application.
The comment period will be for 60 days following publishing of the rule in the Federal Register.
Copyright NATIONAL ASSOCIATION OF REALTORS®. Reprinted with permission.
Written and Published by: VanEd