Lenders are optimistic about a proposed rule that would reinstate FHA spot financing in unapproved condominium projects, saying this could be the spark that would jump-start the slow condo market.The proposed rules would clarify and modify certain FHA rules to kick-start condominium lending activity, and allow some flexibility in existing approval standards. Key proposals include the reinstatement of spot approvals in unapproved condominium developments and extending the effective recertification period for condo approvals to three years, rather than the current two-year requirement. Prior to 2009, spot approval allowed a buyer to use FHA financing to purchase a unit in an unapproved condo project, but the HUD approval process was expensive and time consuming. Consequently, few lenders were able to take advantage of the spot-approval program. The Department of ...