FHA Under Pressure to Give Condo Market Extra Boost
In recent years, as more people have moved away from rural and suburban communities and into cities, demand for condos has surged. In most major metropolitan areas, prices for condos are increasing faster than single-family home prices, according to real estate website Trulia, and condo sales are gaining market share at the expense of other types of home sales.
The condo market could be doing even better, developers and association advocates say, if the Federal Housing Administration (FHA) would loosen its restrictions on approving low down payment loans for units in condo associations. Certain restrictions that were put in place to deal with the housing crisis should now be removed to reflect the improved economy, they argue. Doing so would bring first-time homebuyers, who have traditionally looked to the FHA for financing, back to the condo market in droves, they predict.
Hope for such changes is on the horizon: Industry insiders recently told the Boston Herald that the agency is under pressure from real estate and financial lobbies and “is drafting a major condo proposal for 2015 that could bring back FHA financing to greater numbers of buyers and existing unit owners.” (The full story can be found at www.bostonherald.com/business/real_estate/2014/11/condo_demand_red_hot_but_fha_policies_chill_buyers.)