New FHA Regulations Spell Trouble for Beleaguered Condo Industry

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) October 29, 2009 --

Austin, Texas – As of November 2, 2009, buyers in the market for a condominium may find fewer mortgage options available to them; strict new regulations set to take effect will prevent many buyers from qualifying for FHA-backed mortgages on condominium properties. Mortgage lenders and real estate agents have expressed grave concerns about the chilling effect of these new rules, which are still under review by the FHA.Changes to the regulations governing FHA-backed condominium mortgages may create serious obstacles for buyers and do further damage to the struggling housing sector. By placing further restrictions on which properties qualify for FHA insurance, these new rules will make condominiums a far less attractive option for home buyers.

The new regulations will eliminate spot approvals, requiring rather that the entire condominium development meet FHA standards in order for the property to qualify for FHA mortgage insurance. Additionally, only 30% of the units in any condominium project may receive FHA-backed loans, and over 50% of the units in a given project must have already been sold before any units can qualify for FHA mortgage insurance. It is believed these new requirements will have a serious dampening effect on the recovering condominium market, since far fewer units will qualify for FHA mortgages under these restrictions. Currently, FHA-guaranteed condominium mortgages require only a 3.5 percent down payment, making these housing units especially attractive to first-time buyers and providing an entry point into the housing market. Under the proposed regulations, many condominium units will instead require conventional financing and the 10-20% down payments associated with that type of loan.
About Affinity Properties

Affinity Properties is one of the most productive and experienced Austin Texas real estate (http://www.joecline.com) brokerages. For over six years, Affinity Properties has served the commercial and residential real estate needs of the West Austin area from Lake Austin to Lake Travis, offering personalized advice and unparalleled customer service to buyers and sellers alike. Affinity Properties is a Re/Max agent in the Austin, Texas area. For more information, visit our Austin real estate (http://www.affinityproperties.com) websites at www.AffinityProperties.com and www.JoeCline.com.

About RE/MAX International, Inc.

RE/MAX was co-founded by Dave and Gail Liniger in 1973. From a single office in Denver, Colorado, RE/MAX has grown to be a global network of nearly 100,000 Sales Associates in more than 70 countries. No one in the world sells more real estate than RE/MAX. Today, all U.S. home listings in thousands of cities and towns can be found at http://www.remax.com.

###

austin real estate     austin realtor     austin remax realt     austin texas real estate     remax austin texas