by Lyle Adriano
New rules implemented by the Federal Housing Administration (FHA
) last week could help homebuyers easily acquire mortgages for Miami’s condominiums—though the rules could use some improvement. Previously, federal rules raised the bar too high for those with limited budgets to take out a mortgage for condos.
One of the provisions of the new rules allows a 3.5% down loan offer for first-time homeowners purchasing condominium units. While advantageous, the deal only applies to condominium buildings that are 50% “owner-occupied.” This discourages buyers from considering renter or vacationer-occupied buildings.
A provisional rule was added that will stand for one year that considers second “vacation” units as owner-occupied, as they are not owned by investors.
In a statement, the FHA explained that it is preparing for a more broad rules change should the temporary rule expire. The FHA has its fair share of criticisms from politicians and real estate professionals who said that the old rules were disadvantageous to low and middle-income renters, preventing them from actually owning a proper home.
Housing and Urban Development (HUD) Secretary Julian Castro was sent a letter by members of the congress, calling out the FHA for levying “significant restrictions” on condo financing. The HUD claimed to have reviewed the letter, but has yet to make a response.