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On August 14, 2019, the U.S. Department of Housing and Urban Development (HUD) released the long-awaited final rule on project approval for single-family condominiums insured by the Federal Housing Agency (FHA). After years of advocacy by NAR, HUD's final rule contains several elements that will enable more buyers to be able to use FHA-insured financing to purchase a condominium. Highlights include:
- The return of single unit approval, also known as spot loans, for units in non-FHA approved properties
- Increased certification period from two to three years, plus a six month grace period to submit re-certification materials
- Increased acceptable commercial space to 35 percent of total area
- Reduced requirement for owner-occupancy percentage exceptions
NAR President John Smaby made the following statement: "We are thrilled that Secretary Carson has taken this much-needed step to put the American Dream within reach for thousands of additional families. It goes without saying that condominiums are often the most affordable option for first-time homebuyers, small families and those in urban areas. This ruling, which culminates years of collaboration between HUD and NAR, will help reverse recent declines in condo sales and ensure the FHA is fulfilling its primary mission to the American people."
HUD Statement on the Condominium Rule