When FHA announced sweeping changes in its condominium policies back in June, there were some negative changes such as the elimination of the Spot Condo approval, which allowed for a single unit approval based on a one page questionnaire even though the complex was not as approved as a whole. Approval of condo complexes is now a streamlined affair as proclaimed by HUD. But, the new news has to do with the cross-breed known as the Site Condominium as defined below:
Site Condominiums are single family detached dwellings encumbered by a declaration of condominium covenants or condominium form of ownership. Condominium Project approval is not required for Site Condominiums; however, the Condominium Rider must be included in the FHA case binder submitted for insurance endorsement.
The guidlelines of ownership is the key element. These are homes on their own lots in a development that have condo ownership in some common elements and may have some common care covenants. Here in Pinellas Park, FL, one such area had lost its FHA condo approval status for several of the 'units' which consisted of dozens of single family ranch style homes. But, since they are considered 'Site Condos', they can be financed using FHA just like a single family home. So, the Mortgagee Letter in this case, gave the nod for more possibilities, not less. Condo master policies are still needed and there is the HOA dues amount to factor into qualifying, but things sure got a lot easier for folks buying and selling in The Mainlands.
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