In the past condo owners were lucky if they were one of the few condo complexes that were FHA approved; only 6 ½ % of condos are actually FHA approved (housingwire.com). I worked with an applicant in San Diego and we tried for 6 months to get her condo to apply for FHA approval. She went to the board meetings multiple times; they had to send surveys out to the residents to vote on getting approved. The board had to approve it, and in the end, they decided against even trying to get FHA approval. My client was very disappointed that she could not eliminate her monthly mortgage payment through a reverse mortgage.
Earlier this month, the FHA announced that they will be easing condo regulations. Starting October 15th, 2019 Condo owners can apply for individual, or “spot” condo approvals, spot condo approvals have not been allowed for over a decade. There will be no more need to go before the board or send out surveys to owners, a condo owner can simply apply for approval individually. One of the proposed changes is that they limit condos to only 10% FHA concentration in order to get a spot condo approval. This change also extends the recertification requirement for approved condos from 2 years to 3. The changes will also allow for mixed-use projects to be eligible for approval.
Ben Carson, the current HUD secretary said of these changes, “Condominiums have increasingly become a source of affordable, sustainable homeownership for many families and it’s critical that FHA be there to help them.” These changes go a long way to help retirees qualify to eliminate their monthly mortgage payment and move forward with peace of mind. If they qualify for a reverse mortgage, a senior will still need to pay their required property tax and home insurance payments. To read the full Mortgagee Letter click here. To get on the waiting list and secure your spot condo approval before the 10% maximum allowance in your condo, contact: Robert Snow Krepps, NMLS # 255191, at HighTechLending Inc, at rkrepps@hightechlending.com or 877-567-7476.
HighTechLending Inc, NMLS # 7147, is an Equal Housing Lender. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act.
