Summer might traditionally be the time to buy, but if you missed out this summer, don’t worry! The Federal Housing Administration (FHA) just released new guidelines to promote homeownership, especially among first-time buyers. These changes will be in effect later this fall which means that the best time to start looking for your new home is right now!
The FHA released new guidelines on August 15, 2019 on how FHA mortgage insurance impact condominium units and projects. Here are some of the changes:
- Individual condo units are eligible for FHA mortgage insurance even if the condo project itself is not FHA approved.
- FHA approvals for condominium projects have also been extended from two years to three years.
- Condominium projects no longer have to submit all project information to be recertified, just update new information.
- Commercial space restrictions are eased to allow more mixed-use projects.
- Condominium projects owner occupancy rates are lowered from 50% to 35%.
- The FHA will insure up to 75% of condominium unit mortgages within a project.
These changes go into effect on October 15.
Why It’s Good News
The changes make it easier for condos to get approved for FHA mortgage insurance, especially individual units! This means that you can be approved for an FHA loan even if the condominium project itself is not FHA approved.
With more units qualifying, this means more options for first-time homebuyers who want to buy with an FHA loan. According to the LA Times, “just 6.5% of the 150,000 condominium developments in the United States were previously eligible for FHA-backed mortgages.” FHA loans allow down payments of as little as 3.5% for borrowers with a credit score of 580 or higher. You can see how these changes will add many homes into the housing market – so you can find a home at an affordable price!
How Can It Help Me?
Here in San Diego, home prices have been on the rise. But condos remain an affordable choice for first-time home buyers! The median price for a condo in San Diego County is only $425,000. With an FHA loan limit of $690,000 in San Diego County, more FHA-approved condos means more options for first-time home buyers. Interested in looking at condos in San Diego County? You can start your search right on my website by clicking here or give me a call at (858) 735-5767!