FHA issues new condo rules

Just when it seemed it couldn't get any tougher to sell a condominium unit, here comes another wave of rules.

New Federal Housing Administration rules, effective Dec. 7, have Realtors and lenders predicting negative consequences on the Alabama coast.

Basically, condo buyers would be eligible for an FHA-insured mortgage only if:

At least half the units in the complex are already sold.

At least half of the owners occupy their units (not rent them).

A maximum of 30 percent of the project units can have FHA-insured mortgages.

In addition, spot approvals will be eliminated and the en tire complex will have to be FHA-approved before a loan is made.

The national trade associations for Realtors and home builders have asked the FHA to eliminate or raise the 30 percent limit for FHA loans and reduce the 50 percent presale requirement.

"The new regulations will make our recovery and absorption of excess inventory take a little longer," said Chuck Norwood of REMAX of Gulf Shores.

Fannie Mae and Freddie Mac require up to 70 percent of the units in a complex to be sold before either backs a loan, and about 51 percent of the condo building must be owner-

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