September 5th, 2010 | 
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The Department of Housing and Urban Development (HUD) has restricted the use of FHA loans for condominiums. The new rules state that no more than 30% of the units in a condominium complex can be financed with FHA loans. To make matters worse, 50% of the units must be sold before FHA will make any loans in that complex. What??? FHA loans are ideal for first time buyers because they allow for low down payments of only 3.5%. Condos only exist in states where prices of houses are too high for first time buyers. What are first time buyers going to do? Save up 10% and finance with a conventional loan? They just took FHA away from the market it was designed for.
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