From a recent CNU email: "FHA recently revised rules that limited the cap of commercial space in mixed-use condo buildings from 25% to an updated 35% commercial use, with possible waivers for developments with up to 50% commercial space." From LA Times writer Kenneth Harney: "The revised guidelines, which were issued Sept. 13 and took effect immediately, should make it easier for homeowner associations to seek certification by the FHA. Without approval of an entire development, no individual unit can be financed or refinanced with an FHA mortgage.
"The agency's previous rules prohibited FHA insurance of units in buildings where more than 25% of the total floor space was used for nonresidential purposes. Yet many condominiums in urban areas have lower floors devoted to retail stores and offices." Full article here.
FHA regulations have a disproportionate effect on small buildings, for example a building with 1 story of retail and 39 stories of apartments is in no danger, while a building with 1 story of retail and 2 stories of residential was uninsurable, but now could be eligible. Let's get building!