Selling a condo just got easier. Effective immediately, the Department of Housing and Urban Development now allows FHA financing for condo buildings with just a 35% owner-occupancy rate.
Listing agents, rejoice! Buyer agents, rejoice! It’s time to list some condos! Gone are the days when a condo building had to have a 50% owner-occupancy rate to get financing. Those agents who kept a list of `unwarrantable’ condo buildings at the ready will find sweet relief in this new provision.
However, there is a catch. To take advantage of the new rules set forth in the Housing Opportunity Through Modernization Act of 2016, there are three conditions:
- The condo building must have replacement reserves of at least 20% of the budget.
- No more than 10% of the unit owners can be delinquent (60 days or more) in paying their homeowner association fees.
- The condo building must have three years of acceptable financial documents.
In other words, agents must still do their due diligence. On the bright side, this is a marketing opportunity. Condo owners who want to move, but fear their building is overrun with renters can now sell. Maybe — just maybe, this could lead to more listings.