New Condo Laws

FROM OUR HOATALK HOMEPAGE.

A blow to condo sales
Under new Federal Housing Administration rules that took effect Oct. 1, condo loans must meet these conditions:

• Project must be primarily residential.

• No more than 10 percent of the units may be owned by one investor.

• No more than 25 percent of the project's floor space can be commercial use.

• No more than 15 percent of the units can be 30 days or more past due on condominium-association fee payments.

• At least 50 percent of the units must be owner-occupied or sold to intended owner-occupants.

Source: Federal Housing Administration.

Of course these guidelines only apply if a potential buyer is seeking an FHA loan.

And here's another tidbit about the new regulations if a developer intends to market his units with FHA mortgage ins.

"Buried in the fine print is a requirement for an affirmative action-type housing plan. For both new construction and conversions, if the developer intends to market 5 or more units within the next 12 months with FHA mortgage insurance, an Affirmative Fair Housing Marketing Plan (AFHMP) or a Voluntary Affirmative Marketing Agreement (VAMA) must be in place. An affirmative fair housing marketing plan requires that the racial, socioeconomic, and ethnic composition of the condominium residents closely mirror that of the neighboring area, to the greatest extent possible. Most new condominiums don’t have these in place."