New FHA Rules Simplify Financing for St. John Condos

Here on St. John, we have several condominium developments, and they are very popular with St. John real estate buyers. Buyers appreciate the affordability, convenience, and services provided by St. John condos, and here at Tropical Properties we frequently assist families with St. John condo purchases. We’re pleased to report that condo purchases have just become a great deal easier because of new FHA condo guidelines issued by the Federal Housing Administration.

Historically, it has been difficult to obtain FHA financing for condominium purchases, but that changed this year when the new guidelines took effect on October 19.  FHA loans offer looser credit requirements than conventional loans and require only a 3.5 percent down payment. They are popular with condo buyers who are seeking to enter the St. John housing market at a more affordable price. Private Mortgage Insurance (PMI) is required for all FHA loans, in order to protect the lender in case of default. The PMI is paid monthly as part of the overall mortgage payment to the lender.

Take a look at the changes to FHA financing for condos:

  1. Owner Occupancy: The ratio of owners to renters is one factor in FHA approval, and the target number for approval has been lowered from 50 percent to 35 percent.
  2. Certification: When a condo is certified as FHA eligible, it now stays eligible for three years instead of two. The process of renewing certification has been simplified as well.
  3. Spot approvals: Now individual condo units are eligible to be approved for FHA loans, even if the entire condo building is not on the approved FHA list.
  4. Commercial Space: In the past, condo units in mixed-use developments were rarely eligible for FHA loans. Now the amount of commercial space allowed in a condo has been increased, making more condos eligible.
  5. Concentration: FHA loans are now available to larger percentages within buildings, up to 75 percent of all units in a project can be FHA financed.

In the U.S. Virgin Islands, the FHA loan limit is $765,600 for single-unit buildings, $980,325 for two-unit buildings, $1,184,925 for three-unit buildings and $1,472,550 for four-unit buildings. If the loan amount is higher than these conforming rates, it is considered a jumbo mortgage and will require a larger downpayment.

Daniel Boudreau, Managing Broker of Tropical Properties Real Estate and Development in St. John says “The FHA requirements have prevented many people from purchasing condos in the Virgin Islands in the past. Now the door is open for many new buyers. The changes to FHA financing requirements will make it easier to get a mortgage on St. John condominiums. I expect this to have a positive impact on the condo market in St. John.”

Condos in St. John are found in communities like Cruz Views, Gallows Point, The Hills, and the Residences at Sirenusa. They range in price from the mid $400s to $2.1 million. Luxury amenities like clubhouses, fitness centers, and tropical gardens make many St. John condos feel like private resorts with all the comforts of home. Contact Tropical Properties to learn more about the new FHA rules for condo purchases and how they can help you secure your dream home in St. John.