FHA-Implementation of Condominium Project Approval Owner Occupancy Requirement

Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2016-15 which establishes FHA’s condominium project approval owner occupancy percentage requirement, as mandated by the Housing Opportunity through Modernization Act of 2016 (HOTMA). FHA believes this requirement offers a balanced approach between providing affordable, sustainable housing opportunities and managing risk to FHA’s Mutual Mortgage Insurance Fund (MMIF).

Specifically, Mortgagee Letter 2016-15 amends FHA’s Condominium Project Approval and Processing Guide, and:

Provisions contained in the Mortgagee Letter are effective immediately upon publication for all condominium project approval, recertification, annexation, or reconsideration applications submitted for review.