Rumor Mill Regarding FHA Loans

This has not been confirmed yet but apparently FHA may be stopping the practice of allowing "spot approvals" on condos in buildings that are not FHA approved but fit all of the criteria (such as a sub 50% investor ratio and all owners being current on condo dues). This would be truly awful for the condo market as condos require down payments of 15% for conventional financing. FHA loans have gotten so popular partially because the down payment needed for condos has gotten so high and the first time buyers can't come up with the cash. I just had a spot approval on an FHA loan denied to a client because there was already one FHA deal in the 7-unit building and they wanted to "limit exposure" in any given building, so it doesn't surprise me that the recent popularity of the program has caused them to scale back.