Dear Mister Condo,
With regards to the condominium approval process for FHA, I have heard that since HB 3700 was passed. My understanding is that the changes would streamline the application process (possibly extend approval periods), increase investor owned units from 50% to 65% and ease restrictions related to transfer fees. Are you aware of the status?
Mister Condo replies:
M.W., I am neither an FHA expert or a great source for the latest news on FHA. However, I can tell you the full text of this bill is available online at https://www.congress.gov/bill/114th-congress/house-bill/3700/text. Section 301 deals with insurance requirements for FHA. Here are some highlights:
Requirements for Mortgages for Condominiums
(1) Project recertification requirements.—Notwithstanding any other law, regulation, or guideline of the Secretary, including chapter 2.4 of the Condominium Project Approval and Processing Guide of the FHA, the Secretary shall streamline the project certification requirements that are applicable to the insurance under this section for mortgages for condominium projects so that recertifications are substantially less burdensome than certifications. The Secretary shall consider lengthening the time between certifications for approved properties, and allowing updating of information rather than resubmission…
(i) 35 percent requirement.–In order for a condominium project to be acceptable to the Secretary for insurance under this section, at least 35 percent of all family units (including units not covered by FHA-insured mortgages) must be occupied by the owners as a principal residence or a secondary residence (as such terms are defined by the Secretary), or must have been sold to owners who intend to meet such occupancy requirement…
To my eye, M.W., it looks like you are correct on both counts. Of course, with legal matters such as FHA, I always refer condo folks to the experts. In Connecticut, check out https://www.caict.org/page/Directory#FHAfor a list of FHA condo financing experts. All the best!