FHA Financing is Back

TAKING effect Oct. 15, 2019 - it is all about something called "spot approvals."  In order to qualify for the "spot approval" for FHA condos, the maximum loan to value will be 90%. The good news is that FHA will approve lower credit scores where Fannie Mae and Freddie Mac might require 20% or more down.  

The best part is that most of FHA is not credit score based. This means someone with a 660 score will get the same rate and PMI factor as someone with a 760 score. Yet on conventional, the 660 score would have a much worst rate and PMI factor (and might not even be approved). So overall, it is a big improvement to where we were a month ago, but not what everyone got all excited about at first I.E. 3.5% down on condos everywhere!

-individual condo unit in a building of 10 units or more may be eligible for "spot approval" if no more than 10% of the units are FHA-insured. For units in buildings with fewer than 10 units, no more than two units can have FHA insurance

- loosened restrictions on owner-occupancy rules, stating that eligible condo projects can now be just 50% owner-occupied
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-approved projects can now have up to 35% of their square footage dedicated to non-residential use

-The FHA said it expects the updated guidelines to qualify an estimated 20,000 to 60,000 more condo units per year for financing

Currently, of the more than 150,000 condo projects across the country, only 6.5% are approved for FHA financing.