FHA condo mixed use mortgages
The trend toward such development has grown in recent years, as younger and older people alike have migrated to urban centers to be close to jobs, cultural amenities and entertainment, said Peter D. Cummings, chairman of Ram, a Florida-based mixed-use developer focused on the Southeast and Michigan.
That "back to the city" movement is now spilling into the suburbs, said John K. McIlwain, senior resident fellow at the Urban Land Institute, a nonprofit research organization.
"We've learned that this mixing of development makes for a better urban design, so towns and cities are designing codes to encourage it, and the market is showing interest," he said. "We're going to see a lot more mixed use, whether it's in the urban central city or suburban town centers."
The F.H.A.'s mixed-use rules date to its inception and the growth of federal housing initiatives, according to the Chicago-based Congress for the New Urbanism, which promotes pedestrian-oriented, mixed-use neighborhoods. The rules stemmed from fears that one component of a mixed-use development could fail and place strain on others to maintain the property, a concern revived by the housing crash in 2007.
Enacted in September, the rule change opens the door to government-insured mortgages for condos in mixed-use buildings with commercial footprints of up to 35 percent, up from the previous 25 percent limit. Exceptions may be granted for projects in which as much as half of the space is commercial.