Summary: The growth in condominium ownership and its advantages have led to the enactment of legislation authorizing condominium financing programs for the Department of Housing and Urban Development (HUD), the Veterans Administration (VA), and the Farmers Home Administration (FmHA).
Because of statutory limitations, opportunities for financing are still not readily available to condominium buyers. HUD can only insure mortgages on individual condominium units if it had insured the mortgage on the entire project. This requirement eliminates 97 percent of existing condominiums from HUD's mortgage insurance program. The VA cannot guarantee condominium mortgages if the unit was not originally built and sold as a condominium. Before HUD insures or the VA guarantees a mortgage for a condominium unit, the developer or unit owner must submit separate legal documents to each agency for review. Standardizing legal requirements and agreeing to accept each other's review and approval would increase the number of condominiums approved and eliminate duplication. HUD and VA should do more to inform condominium homeowners of the advantages of obtaining Federal project approval and how to qualify for Federal condominium programs.
