HUD Condo Policies Delayed

The Department of Housing and Urban Development said the Federal Housing Administration is delaying the Oct. 1 effective date of its new condominium policies for one month while it finalizes several modifications. A mortgagee letter issued in June allows FHA direct endorsement lenders for the first time to approve condominium projects so that unit sales can be financed with FHA-insured loans. The industry has welcomed this new streamlined approach to building approvals. However, FHA continues to limit the number of condo units that can be financed in one complex to 30%. And 50% of the units must be occupied before FHA financing can be used. The National Association of Realtors has been pressing HUD to relax those restrictions. "We'll be issuing new guidance soon, with several modifications to the policy described in Mortgagee Letter 09-19," a HUD spokesman said, with a November 2 effective date.