Update Of Fha-eligibility Requirements For Condominiums

If your Association contains single-family attached housing, then the Association is required to be approved by the FHA as an eligible property in order for buyers to have an FHA-loan. Otherwise, units may only be financed with conventional loans. One of the requirements for FHA Eligibility is that 50% of the units must be owner occupied. If your Association is mainly investor-owned, this will be an issue for those trying to obtain financing for an FHA-loan.

However, the Federal Housing Admin-istration (FHA) recently announced a temporary reprieve for Associations on this issue. The FHA is allowing Associations to circumvent the requirement provided that:

1) the ownership votes to amend the Declaration to allow leasing for bank-owned units; or

2) the Association’s Board provides a signed, dated letter on Association letterhead stating that there are no leases that have a term of less than 30 days AND there are no hotel-like services provided.

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