The FHA has recently loosened up some of it’s guidelines which will make it easier for Buyers looking to purchase in Boston. The new relaxed guidelines will allow more condo buildings to be approved for FHA financing and relieve some of the burden that had previously prevented some buildings from applying for approval.
The first big change is to the owner occupancy rate. The owner occupancy rate is especially important in Boston where we’ve covered the increase in default landlords(click here). The rate is now 50% this will make it a lot easier for buyers looking to get into brownstone units.
The second big change is the higher rate of allowable commercial space. Many new properties in Boston are now being built over commercial spaces and it’s been a large part of the city’s new master plan to incorporate both residential and commercial in new buildings. The increase in allowable commercial space means that no longer will you have to get what’s called a portfolio loan requiring a higher down payment and potentially not as competitive a rate. Allowing FHA loans in these situations will force portfolio banks to get more competitive on rates.
If you have questions on the new guidelines or would like more information on loan options, contact our office at 617-449-3642.