Habitat's VP of Condo Management, David Barnhart was recently interviewed for a piece in Yahoo Finance, by Sarah Paynter, about the new changes to condominium financing to help first-time home owners. Read some selection below or the full article here!
It is about to get a little easier to buy a condominium in the U.S.
The Federal Housing Administration, which insures mortgages made by private lenders and banks, will ease condo financing regulations to open up homeownership for more first-time buyers, effective October 15. The move will help qualified homebuyers obtain low interest rate loans and allow smaller down payments for a home purchase.
Under the new rule, individual condo unit owners can apply for federal mortgage insurance, even if the condo association or developer has not applied for funding. Since the agency stopped allowing single-unit approvals in 2008 due to the Great Recession, if a condo development’s leadership did not want to go through the arduous FHA approval process, individual condo owners could not receive FHA funding, according to Orest Tomaselli, chief executive officer of National Condo Advisors, LLC.
“These changes open the door tremendously for first-time homebuyers, with enhancements that will make funding more available,” said David Barnhart, vice president of condominium management at Chicago-based property manager The Habitat Company. The legislation will also help condo owners who want to refinance or apply for a reverse mortgage by giving them more options.
Currently, there are about 15,000 developments in the U.S. approved to participate in the FHA’s mortgage insurance programs, according to the U.S. Housing and Urban Development. The change would open up an additional 20,000 to 60,000 condo units to federal funding, according to HUD. In some markets, like New York City, it would open up 5,000 to 10,000 units, Barnhart said.