Federal agency supports more condo mortgages
WASHINGTON (AP) — The Federal Housing Administration is changing regulations to make it easier for more first-time condo buyers to receive mortgages.
The federal agency has released new guidelines for the types of mortgages it will insure at condominiums. Just 6.5% of the 150,000 condominium developments in the United States were previously eligible for FHA-backed mortgages. But the FHA will start backing mortgages for individual units and will have greater flexibility to react to changes in market conditions.
Brian Montgomery, the FHA commissioner and acting deputy secretary of the Housing and Urban Development Department, says the changes would make it easier for first-time buyers, retirees and minorities to become homeowners. Unlike conventional mortgages that require 20% down, the FHA backs loans that require 3.5% down payments.