A recent update to the Federal Housing Authority condominium loan policies may put the dream of homeownership within reach of more Americans. Recently, the Department of Housing and Urban Development finalized new Federal Housing Authority condominium loan policies which should make this loan type available to more borrowers. According to the National Association of Realtors®, the change should yield thousands of new homeownership opportunities and help alleviate affordability restraints impacting markets across the country.
News of the lending update couldn’t have come at a better time, either. An annual sales report on Texas condominiums and townhomes shows that sales of the housing type have dipped in the year ending July 2019. However, data from the report indicates that this housing type is still a popular product, as the inventory for condos and townhomes increased during the same timeframe.
“We are thrilled that Secretary Carson has taken this much-needed step to put the American Dream within reach for thousands of additional families,” said NAR President John Smaby. “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.”
A report released by the National Association of REALTORS® explains some of the details of the new guidance. Recent changes include an extension of certifications from two years to three, allowing for single-unit mortgage approvals, providing more flexibility with owner/occupancy ratios, and increasing the allowable number of FHA loans in a single project. The new rules go into effect in mid-October.
According to the Texas REALTORS® report, condominiums and townhomes remain a popular housing choice for Texas buyers because they often have lower price points compared to single-family homes. First-time homebuyers also find decreased maintenance beneficial. Developers are building more condo and townhome projects because of the demand to build up rather than out to conserve space.
NAR Chief Economist Lawrence Yun recently noted that despite a slight increase in the median price for existing condos, their relative affordability makes the housing choice an ideal option to develop to mitigate the effects of inventory shortages holding back home sales growth. “Condos are typically more affordable than a detached single-family home, but only a small fraction of condos are FHA-certified,” he said last month.
The new regulatory changes should help boost the sale of condos and townhomes throughout the Central Texas region. House hunters who find themselves priced out of the detached single-family housing market in popular areas may soon have a chance to own a condo or townhome in their ideal location. Developers will likely be relieved that the condos and townhomes they are building will now be more accessible to more buyers. All around, the news should help bolster housing sales throughout the Austin area.
Read more about Austin real estate.
Search Austin Area Homes for Sale