Effectively immediately, The Federal Housing Administration (FHA) has implemented new owner-occupancy rules regarding existing condominium developments. The owner-occupancy requirement for most projects has been lowered from 50% to 35%. The lower percentage only applies, however, if certain requirements are met: applications must be submitted under the HUD Review and Approval Process option, owners need to provide documentation of an account showing at least 20% of the budget is allocated for replacement reserves for capital expenditures and deferred maintenance, and HOA fees cannot be in arrears for more than 10% of the units.
The current 30% owner-occupancy requirement for proposed projects, projects currently under construction, and existing projects less than one year old will remain in effect.
For more information, you can view the FHA’s rule here.