Today FHA announced some big changes to their condo financing guidelines, which will be effective immediately. Calculations for owner-occupied percentages are changing, and second homes will no longer be counted against the 50% owner-occupied requirement. Insurance requirements are also being adjusted to allow more developments to qualify. Also, a new streamlined recertification process has been released. It will allow for expanded eligibility of acceptable “owner-occupied” units to include second homes that are not investor-owned.
This should open up the extremely popular low down payment financing option to many that suffered disproportionately in the housing downturn due to lack of availability of low down payment financing options. The impact could be substantial where many condos are owned as second homes. So while I think this will help that niche market in Seattle, I think it will be make a larger impact on vacation destination locations, like Lake Chelan or even Honolulu. In those markets, the old rule of counting second homes as non-owner-occupied for the purposes of FHA eligibility made it impossible for a number of condo developments to qualify for FHA low down payment owner-occupy buyers.
Join Rhonda Porter and myself this Tuesday morning (Tuesday, November 17, 2015 – 10AM) for our LIVE FREE webinar to go over what these changes in guideline means for people looking to purchase a condo, especially a second home condo.