On Wednesday, August 14, 2019, the Federal Housing Administration issued an update to its condominium rules, which go into effect October 15, 2019. The FHA said it expects the updates, which are intended to improve access to affordable and sustainable housing, will allow an estimated 20,000 to 60,000 more borrowers to qualify for condo loans.
Some of the key changes to the guidelines include:
According to the FHA, only 6.5 percent of the more than 150,000 condo projects across the country are currently approved for FHA financing. These new guidelines could significantly enhance the pool of borrowers eligible for FHA loans.
Due to their lower average price point, condominiums serve as a vital source of affordable housing, particularly as a gateway for first time home buyers entering the housing market. This change will make it possible for a much larger number of people to become homeowners.
Lenders can expect an influx of first-time borrowers into the condo market who are looking to take advantage of these guideline changes. CoreLogic has tools to help you manage the increased demand. CondoSafe takes the hassle out of condo lending, allowing you to write more loans without adding additional resources.
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