Housing Recovery Not Helped By New FHA Condo Lending Rules

Earlier this year, the FHA passed a new set of lending guidelines that effectively removed the spot approval process for FHA insured condominium loans.
Before these guidelines where instituted, buyers looking for approval of an FHA insured condominium loan could file documents for each individual unit, with final approval on an individual or per-unit basis.
The new guidelines require pre-approval of the entire building which puts an end to the spot approval process. So, unless the entire condominium project passes the new guidelines, FHA approved loans will not be available to prospective buyers.
In resort areas, like Mammoth Lakes, condominium sales account for a large percentage of marketplace sales. If a condominium project doesn’t pass the new guidelines, anyone contemplating selling their property and sellers with their property currently on the market are going to be affected.
Does it make sense to tighten lending requirements when there is so much inventory on the market nationwide? Doesn’t it make more sense to ease up on lending requirements, particularly for condominiums, so that qualified buyers can clear out the existing inventory?
Please share your thoughts by leaving a comment or call me at the office: 760-934-5088.
For information on Mammoth Lakes real estate, please log onto my real estate website at www.easternsierraproperties.com