Becoming a first-time homeowner can be a wonderfully exciting experience. Whether you choose a single family home or decide to make your home in a condominium, it’s great to have your quiet retreat that you can customize and turn into a reflection of your tastes and interests. Of course buying a home means having to deal with the paperwork involved in a mortgage. Since condos are typically more affordable than a single family residence, why would federal rules make it tougher to apply for one? That may soon change thanks to the Federal Housing Administration (FHA).
In most cases, the FHA has a loan that requires only 3.5 percent down, a great benefit for first-time buyers. However, this loan did not extend to buyers seeking to buy a condominium unit unless the building was at least halfway “owner-occupied”. When many buildings are mostly comprised of renters and vacationers, that can become a major problem.
The tweaked FHA rules now state that a second home will also be considered “owner-occupied” as long as they are not owned by investors. This means that the many condos throughout South Florida owned by snowbirds would have financing eligibility, significantly boosting the amount of inventory for buyers and also making it a little easier for sellers.
It’s important to note that these new FHA rules are, at least for the time being, temporary and will only last for a year.