The FHA’s rules restrict the FHA from lending in complexes where:
- More than 50% of the units are not owner occupied
- More than 25% of a complex’s square footage is for commercial use
- 15% of the units are 30 days late or more on their HOA dues
.... Limitations on the number of rental occupants has reduced the number of potential buyers for units in non-eligible condominium buildings and some argue that this pattern has hampered the recovery of markets like Phoenix and Miami where investors are buying up units to convert into rentals.
Read it in full context: FHA Condo Lending in a New Paradigm.