The U.S. Department of Housing and Urban Development (HUD) recently announced changes to the Federal Housing Administration's (FHA's) condominium approval policies. Among other adjustments, HUD altered its policies governing the maximum levels of delinquency and leasing in FHA-approved condominiums.
Under the new FHA standards, no more than 15% of the total units in a condominium can be more than 60 days past due on assessment payments. This percentage includes units that are occupied, bank-owned, or vacant. HUD warned that it will not grant exceptions to this rule.
The new FHA standards retain the requirement for completed condominiums that are over a year old to be at least 50% owner-occupied. For condominium projects that are proposed, under construction, or less than a year old, however, HUD now requires a minimum owner-occupancy percentage equal to 30% of the condominium’s declared units.
HUD's letter describing the complete set of changes to the FHA condominium approval policies can be found here.