New FHA Condo Rules Expand Access to Reverse Mortgages: "In response to changing conditions in the condominium market, the Federal Housing Administration (FHA) today proposed new rules that would allow individual condo units to become eligible for FHA financing, including Home Equity Conversion Mortgages (HECMs), an agency spokesman confirmed to RMD.
FHA is currently seeking public comments on the 43-page proposed rule that seeks to reinstate a process similar to “spot approvals” in unapproved condo developments, as well as create a range of thresholds required for FHA approval, including the minimum owner-occupants in approved condo projects and limits on commercial/non-residential space, the agency stated in a release.
The proposal, which “certainly includes HECMs,” according to the Department of Housing and Urban Development (HUD) spokesman, will differ from the agency’s former “spot approvals” process, though no further details were able to be provided."
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1 comment:
Well the reverse mortgage deals aren't really that great. The fees charged and the appraised values used for determining the amount that can be borrowed tend to be abysmal.
Nonetheless this is an escape route where homeowners have an ability to get some equity and then stick the taxpayers (via Fannie Mae, Freddie Mac, etc.) with the condo liability. That's the only route to escape when there is no next greater fool around to purchase the property from the "unit owner". Maybe when Fannie and Freddie and the FHA get stuck with enough condos there will be changes to condo law.
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