The federal government may soon come to the rescue of stalled luxury condominiums in Manhattan.
Manhattan luxury condominiums known for posh amenities and high price tags are beginning to apply for Federal Housing Administration backing.
Condominium developers hope to open financing opportunities for their purchasers as well as guarantee a little protection for themselves. Not only will lending institutions be more willing to lend to purchasers with FHA backing, but the FHA will pay the mortgage should a home buyer default.
The FHA loosened the condo rules because of “market conditions,” Lemar Wooley, an agency spokesman told Bloomberg.com
The U.S. Department of Housing and Urban Development relaxed its financing rules in December, allowing the FHA to insure loans on new developments where only 30 percent of the rental units are in contract instead of 50 percent.
“Something has to happen for this product to be marketable,” Jonathan Miller said. “I just find the whole thing ironic that FHA is providing financing for luxury housing.”
Yeah, really. What happened to the free market?