A new policy from the U.S. Department of Housing and Urban Development will expand the amount of condos eligible for mortgages through the Federal Housing Administration, Realtor.com reports.
The government-backed mortgages are popular with first-time buyers because they require as little as 3.5% as a down payment, in many cases. But the vast majority of condos have not been eligible for FHA financing, which has been heavily restricted in the wake of the housing crisis that began in 2006.
The new rules, which are expected to extend eligibility to 20,000 to 60,000 additional condo units, go into effect on Oct. 15. Condos tend to be popular with first-time buyers and retirees looking to downsize from single-family homes and their maintenance, as well as folks living in urban areas with limited space. They also tend to be cheaper than single-family homes.
“Condominiums have increasingly become a source of affordable, sustainable homeownership for many families,” U.S. Housing and Urban Development Secretary Ben Carson said in a statement. “Today, we take an important step to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age in place.”