With the Federal Housing Administration struggling to meet its reserve fund regulations, city developers were holding their breath, hoping that the organization, which allows apartment buyers to put as little as 3.5 percent down, would continue to back loans. The organization’s troubles have shed new light on the importance of FHA, which some city developers say has become integral to the financial security of the condo business. “If you asked me about FHA a few years ago, I would have looked at you funny,” David Kramer, principal of the Hudson Companies, the developer of FHA-approved condominium Third + Bond in Carroll Gardens, said. “Now we have gotten involved in making sure that as many financing options as possible are available for buyers, and that is where FHA comes into play.” In the wake of the FHA’s financial woes, regulators have chosen to actually loosen standards, Crain’s reported, with condos needing just 30 percent of units pre-sold, as opposed to 50 percent, to qualify for FHA as of Dec. 7.
As FHA overcomes financial hurdles, developers breathe easier
