After several attempts to finalize, the Federal Housing Administration (FHA) has finally issued new lending policies to take effect Dec. 7. Because of the economic struggles in the market, however, several temporary exceptions have been implemented. Permanent changes include a ceiling of 30 percent of all condo units in one complex that can be funded by FHA (with its less-restrictive downpayment requirement.) Exceptions to this are effective through Dec. 31, 2010.

One of the most important exceptions is that foreclosed properties will not be included in the 30 percent.  HUD has also put into place a “Spot Loan Approval Process” specific to condos, and effective through Feb. 1, 2010. This will allow any FHA lender to finance one condo unit in a building that has not been approved by HUD.  For the first time, direct-endorsement lenders have the authority to approve condominium projects, streamlining these loan approvals.

This is all good news for those who need to sell or buy a condo, agents who are struggling to unload their clients’ condos, and real estate publishers whose local agents and consumers have been frustrated by ad dollars that don’t result in completed condo sales. Here are more details, direct from FHA.

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