Federal Rule Change Could Spur More Mixed-Use Development
According to Schmitt, the FHA has finally loosened restrictions on the amount of commercial space a condominium project could have and still be eligible for financing, "thanks in large part to the efforts of groups like Congress for the New Urbanism and the National Association of Realtors."
"FHA loosened a restriction that forbade government-backed loans from supporting condominium projects that contained more than 25 percent commercial space. New rules will allow credit to flow to projects with up to 35 percent commercial space - or 50 percent in certain cases where the developer applies for an exemption." The outdated restrictions, says Schmitt, "have hampered the growth of mixed-use housing."
"This is one indication that FHA is making big strides," said CNU spokesperson Benjamin Schulman. "We view this as the first step in this long process to reform the regulation."