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ARTICLE · 10 OCTOBER 2013

FHA Condominium Approval - Mixed-Use Projects

Reed Smith
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Real Estate, Condominiums, Development, FHA Financing, Mixed Use Projects, Mortgage Guarantees, Real Estate Development

United StatesReal Estate and Construction
Robert Diamond
Robert Diamond
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On September 13, 2012, FHA issued Mortgagee Letter 2012-18, putting in place a few temporary condominium project approval guideline changes, effective through August 31, 2014. Among the guidelines affected is the maximum percentage of non-residential space permitted in the project to qualify for FHA financing.

Under the previous guideline, no more than 25 percent of the project's floor area could be used for non-residential or commercial purposes. FHA has now created four classes of mixed-use condominium projects:

  1. Projects with 25 percent or less of their floor area used for non-residential or commercial purposes complies with the guideline and can be approved under both delegated underwriting and HUD project review at the HOC level

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