New FHA Guidelines Poised to Make Positive Difference in Financing Condominiums

Agency’s changes affect condo owners, associations, investors and developers of mixed-used condominium projects across the U.S.

MIAMI, FL (December 17, 2012)– Leading real estate portal released a synopsis of the Federal Housing Administration’s recently retooled rules that many condo buyers and sellers had deemed controversial and stifling for the condo market throughout the nation. In fact, some of the agency’s rules in the past have caused thousands of buildings across the country to lose their eligibility for FHA financing. Revisions to such rules provide more relaxed and flexible standards, reducing the barriers to obtaining condo financing.

The agency’s new guidelines affect four major financing areas, as depicted in the attached infographic:


1. Ratio of Commercial Space – The ratio of condos to commercial units has been relaxed. The FHA can now approve loan applications from people seeking to buy in condo developments that have up to 50 percent of their space set aside for commercial use. Under the old rules, developments with more than 25 percent of its space devoted to commercial would not be approved. That’s good news for developers of mixed-used high-rise and mid-rise projects who want to attract restaurants or retail businesses for the ground floor and condominium buyers for upper floors.

2. Investor Ownership – The agency now allows single investors to buy up to 50 percent of the units in a development. That’s a significant increase from the old guidelines that held individual investors to only 10 units each. This could prove to be a boost especially for businesses in resort areas where closings have fell through because an individual who wanted to invest in just 11 or 12 percent for instance was denied.

3. HOA Delinquency Dues Limit – The FHA now says it will put its stamp of approval on developments where up to 15 percent of its home owners are 60 days late on their association fees. That gives HOAs a lot more flexibility than the old rule’s 30-day delinquency limit in which some owners simply may have needed information about debt management to help them pull through the down times.

4. Board Member Liability – The final major change concerns the liability risk of condominium boards of directors. Before the change, board representatives had to declare they had absolutely “no knowledge of circumstances or conditions” that could adversely affect the building. Because many HOA board members serve as volunteers, they were averse to taking on that legal burden. The new rule recognizes that board members are acting in good faith when verifying condo information.

“This is welcome news for everyone across the board from condo owners, condo associations and developers of mixed-used condominium projects,” stated Richard Swerdlow, founder and CEO eReal Estate Holdings LLC, the parent company of “The new guidelines stand to make a significant difference in whether condominium properties across the U.S. will be bought and sold to help further stimulate the economy,” he added.

About eReal Estate Holdings
eReal Estate Holdings LLC owns and / or operates the category-defining portals,, and These real estate portals are the world’s largest online marketplaces for real estate with more than 30 million properties for sale, rent and vacation in the United States and 70-plus countries around the world. The sites receive more than 1.5 million visitors per month, and cost-effectively deliver exposure and qualified leads to builders, real estate professionals and homeowners. In addition to property for sale and properties for rent, site visitors have access to a wide variety of real estate-related products and services, including mortgages, credit repair, home improvement, moving and more. was launched in beta in November 2012 in order to capitalize on the rapid growth of location-based advertising and search.

The privately held eReal Estate Holdings LLC is headquartered in Miami, Florida. For more information, please visit

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