West Knoxville Condos: FHA Updates Condo Rules
In the past, for West Knoxville buyers who were trying to buy a condo with an FHA mortgage, the process could be slightly difficult. Not only did the buyer have to be approved for the loan, the condominium complex had to be approved as well. Luckily, as of September 13th of this year, the FHA has announced new condo guidelines.
Here is a breakdown of the new FHA condo guidelines:
–Condo Fee Delinquency Rates. Under the previous FHA condo guidelines, condominium complexes would not be approved for FHA loans if 15% or more condo owners were 30 days past due on their condo fees. Under the new guidelines, complexes will still not be approved if 15% or more of condo owners are late on their condo fees; however, what is considered to be “past due” has been extended to 60 days late.
-Clarification of Investor Ratios. The new guidelines require more than 50% of the condos to be owner-occupied, which was previously the case under the old guidelines, but now, the ratio is easier to achieve. Under the new guidelines, second homes are also considered to be owner-occupied and new units owned by the developer are also considered to be owner-occupied. Also, now a single investors or several groups of investors can own up to 50% of the complex, when in the past they could only own up to 10%.
-Easier restrictions for mixed-used developments. In the past, mixed-use developments could only consist of 25% commercial space, which could be difficult for small complexes. Now, the new regulations allow for up to 35% of the development to be used for commercial purposes.
Unfortunately, for buyers using an FHA mortgage to buy a West Knoxville condo, one restrictions has not changed. In each West Knoxville condo complex, only 50% of the loans in the complex can be FHA mortgages. If a complex is over that limit, the loan application will automatically be denied.
Are you thinking about buying a West Knoxville condo? Please let us know if there is anyway that Knoxville Home Team can assist you in your condo search. You can contact Rick at 865-696-9002 or via email at Rick@TheBigOrangePress.Com. Or, you can contact Kati at 865-392-5880 or via email at Kati@TheBigOrangePress.Com. Also, be sure to check out our West Knoxville Condo Search Page to see what homes are for sale in the area.