Condominiums at Park Place at Mill Island on Mill Race Road in Wormans Mill.

As condominiums have become a smaller part of Frederick County’s development scene, local Realtors are hopeful that new federal guidelines will help lead to a resurgence.

The U.S. Department of Housing and Urban Development recently announced new condominium loan policies from the Federal Housing Authority that make FHA-backed loans for condos more widely available.

The changes allow mortgage approvals for single units, provide more flexibility on how many units in a building must be occupied by owners versus being rented out, and increase how many units in a project can be financed by FHA loans. The change will go into effect in mid-October.

That’s all good news for the real estate industry, said Maureen Nichols, president of the Frederick County Association of Realtors.

The increase in financed loans means more people will be able to buy condos, units in a larger building that are individually owned, with financing available to them, she said.

A building without FHA approval limits the pool of buyers available.

But the new guidelines give Realtors a larger inventory of homes to show buyers, and help with affordability, Nichols said.

“It just loosens those restrictions,” Nichols said.

According to the National Association of Realtors’ most recent report for sales of existing homes, condominium and co-op sales dropped 3.3 percent from May to June, and 6.5 percent from the same time in 2018.

With more than 8.7 million condominiums available nationwide, fewer than 18,000 buyers have taken out a loan for a condo in the past year, according to a release from the Frederick County Association of Realtors.

The drop in condo sales is reflected in the types of housing for which Frederick County has issued permits in recent years.

In 2018, 79 percent of permits were for either single-family or town houses while only 21 percent were for multi-family, which could be apartments or condos, according to the most recent annual report from the Frederick County Planning Commission.

In 2017, 22 percent of permits were multi-family, a large drop from the 51 percent in 2016.

The Wormald Cos., which built Frederick’s Wormans Mill community along with other projects in the region, stopped building condos around 2009, said Robert Wormald, the company’s owner.

The company’s four condo buildings in Wormans Mill took some time to sell, he said.

A fifth building that had been planned as condos was changed to villa-style town houses instead, he said.

Part of the issue is financing, with banks usually wanting half of units sold in pre-sale purchases in order to finance condos, Wormald said.

But the industry also seems to swing back and forth between building apartments or condos, with apartments more en vogue now.

In the wake of the Great Recession, they’re also seeing many people without savings for a down payment, who choose to rent an apartment rather than buy, he said.

Maybe that’s a good thing, since before the recession, banks would give a loan to anyone even if they couldn’t afford the payments and ended up going into foreclosure, Wormald said.

Meanwhile, Nichols believes the new guidelines will benefit both the building industry and buyers.

“It’s good all around,” she said.

Follow Ryan Marshall on Twitter: @RMarshallFNP.

Ryan Marshall is the transportation and growth and development reporter for the News-Post. He can be reached at

(1) comment


There is a good reason HUD/FHA has been reluctant to back loans for condos -- they have proven to be a bad investment for many buyers. The buyers bail out and HUD is left holding the bag.

In private, even most real estate agents will warn clients to avoid condos. Condo fees often eat up most, if not all of the appreciation, and HOA rules (CC&Rs) often severely limit the owner's ability to rent, etc.

A quick Google search will turn up numerous articles like this:

Condos primarily benefit the developers that build them, and to a lesser extent, real estate brokers/agents, and mortgage brokers. Their lower prices may be appealing up front, but most people a re best advised to steer clear.

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