Sustainable Development & Restoration Business Conference

 This week I spoke with Rob Bailey, founder of The SourceNewport conference being held this year in Newport, Rhode Island October 21-23, 2009. This Summit brings together financial resources for historic real estate investment and projects, success stories of new businesses in historic communities and a discussion about how Hollywood depends on historic communities, focusing on design guidelines and business solutions for sustainable & historic development.

 More than the “green” marketing gimmick, sustainability is really a discussion about the future.  The adaptive reuse of existing buildings is one of the easiest and most cost effective paths towards sustainability.  To that end, SourceNewport is partnering this year with Sustainable Communities, Inc., and will be addressing the aspects of money and local policy.  ”Restoration of community has been the lifeblood of American tradition, and the secret formula for New England is the green economics of preservation and restoration”, according to Bailey, this is why he launched the event in Newport.

 This week’s real estate insight:

Great old mills turned into fabulous live-work artist lofts, obsolete factories turned into shopping malls, defunct shopping malls turned into schools, old churches turned into condominiums, an old strip mall turned into a church. These are all examples of adaptive reuse, adapting and evolving existing buildings to suit present day needs. For more information, visit: www.sourcenewport.com.

 HUD issued Mortgagee Letter 2009-19 with important changes to the guidelines for Condo financing.  The guidelines were originally scheduled to take effect on October 1^st, but are now scheduled to take effect November 2^nd.   One of the major changes has to do with the Approved Condo list; Currently, FHA has a list of Approved Condo’s,   if a project is on the approved list then FHA financing is allowed, if the project met the other requirements.  Spot Approval provided a way to close FHA loans in projects that were not approved; spot approval will no longer be allowed.   According to the new guidelines, any project not approved in the past 12 months will be taken off the FHA Condo Approval list and new projects currently approved will have 12 months to re-certify, so basically the entire list of approved condo’s is being redone.  

Here are some more proposed guidelines to be mindful of:

• 4+ units can have 30% maximum FHA financed units, (which might change to 50%).
• No more than 15 % of the units can be in arrears of the condo association fee.
• No more than 10% of the units can be owned by a single investor.
• 2 and 3 units are now allowed, but HUD will only insure one of the units.
• Right of First refusal considered on a case by case basis, (as long as you can prove it is not discriminatory).

This Week’s Real Estate Insight:

If you are thinking about buying a Condo with FHA financing, do yourself a favor and look for HUD approved units.  If you are selling a unit that is not HUD approved, understand that the pool of buyers is smaller, and non HUD approved Condos are going down in value, you might have to price below market to compete.  If you live in a non- approved building, strongly suggest to your Condo Board that they go about the approval process.

To find out if a condo project is FHA approved, click here for the HUD webpage: FHA condo approval search