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  1. #1
    Join Date
    Oct 2010
    Posts
    1

    Default FHA Regulations of Condo Auctions, Owner-Occupancy

    My question involves a condominium located in the State of NH.

    I will pose my question as a hypothetical.

    Let's say seller has 50 condo units that he desires to sell at an auction. New FHA guidelines require that 50% of the units be onwer-occupied for buyers to qualify for an FHA-backed loan.

    Seller desires to limit the number of investors (those who are not owner-occupiers) who place winning auction bids so as to maintain the owner-occupancy ratio.

    For example, once 25 of the 50 units are auctioned off to investors, seller wishes to prevent investors from bidding on the remaining units. In other words, can seller restrict bidders on the remaining units to those who are owner-occupiers only.

    If so, how might such a restriction work? Would a term or condition of bidding work?

    Thank you.

  2. #2
    Join Date
    Sep 2010
    Posts
    19,846

    Default Re: New Fha Regs, Condo Auctions, Owner-Occupancy

    He would certainly need to make it an auction terms. Whether that would be legal would depend on state law (and I'm not delving into NH auction law) and probably also to be effective by the condo bylaws and other restrictions. Anybody with that big of a stake in things would be smart enough to get a lawyer to review the issues.

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