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Some Good News from HUD | Legal Insights Blog

Our blog and quarterly events addressing the issues affecting condo association and HOA boards.

Some Good News from HUD

After the real estate melt down of 2009, HUD and the FHA imposed strict requirements on condominium projects for approval of federal lending to condominium buyers, thus making condominiums the poster child for the financial crash.  20 years after the crash, in August, 2019, HUD and FHA loosened these restrictions somewhat.  The biggest change is that FHA loans now may be granted to a condominium buyer on a “spot approval” basis without the entire community being approved, provided the condominium project meets other HUD viability tests for financial stability noted below.  In addition, the new rules change the timing for the renewal of HUD project approval from every two years to every three years.   The new rules also allow the FHA to make exceptions for project approval on a case-by-case basis effectively building some flexibility into the process for slightly non-conforming condominium projects.   Otherwise, the process and standards of project approval for FHA lending remain largely the same as prior to August, 2019.  Among those continuing standards are:  no more than 50 percent of unit mortgages may be insured by the FHA; at least 35% of the units must be owner occupied; no more than 15 percent of the units may be more than 60 days delinquent in fees; no individual may own more than 10 percent of the units in a project of 20 or more units; and fidelity insurance for theft of funds must be in place. 

These relaxing changes were needed, but some would argue that they don’t go far enough, and the trust level is still very low at HUD and the FHA.  And so, while the condominium is no longer a poster child, its picture is still on the wall in the post office.


Call any member of Williams & Strohm if you have questions about condominium project approval.  614-228-0207.

Charles T. Williams

Charles T. Williams

Charles T. Williams (retired) is the firm’s founder. A native of Columbus, Ohio, and a veteran of the Vietnam war, Mr. Williams earned his law degree from Boston College Law School. During his years of providing legal counsel, he was widely recognized as one of Ohio’s foremost attorneys to practice homeowner association law and condominium law.