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You heard correctly. At least 51% of the units in the project must be owner-occupied. There are other restrictions you probably want to know about, such as:
No single entity may own more than 10% of the units in a project. For condominium projects having more than 30 units, no more than 10% of the units may have FHA insured loans at any given time. Condominium projects consisting of 30 units or less can have up to 20% of the units financed with an FHA insured mortgage under the spot loan rule.
This straight out of the FHA rules.
Lender rating
Since September 2009
Featured Rates are based on state rates for 30 year fixed loans and are valid for the date shown, but they may change without notice. They are for consumers with a credit rating of 720 or higher and a 20% or higher down payment. Rate, terms, pre-paid finance charges, and APR may vary based on factors such as creditworthiness of the applicant(s), self employment status of the applicant(s), condo or townhouse structure, loan amount, and geographic location of the property.
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Mortgage on a condo with high percentage of rental units (3/5 units rented)
Martin
Seattle, WA
Contributions: 19
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I heard that there might be issues with buyers getting loans if a condo has more than 50% units rented.
I am in a condo that has 5 units of which 3 are rented by owners. Is it truly a negative when it comes to potential buyers getting approved for a loan in this situation?
We are considering changing our bylaws to enforce less than 50% rental requirement, but it seems that it limits the flexibility of condo owners.
Thus I am hoping for some good advice from mortgage proffesionals here!
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