Keeping abreast of the FHA Condo Approval Process is crucial in ensuring successful closing of your condo listing or purchase. There are very lenders doing spot approvals these days, so clarifying the status of a specific condo project BEFORE a purchase contract is entered into will save all parties concerned a lot of anxiety and frustration.
It is also strongly recommended that the HOA certification is ordered at the BEGINNING of the loan process. There are many reasons the purchase of a condo can run into issues in the underwriting process. The most prevalent is the ratio of owner occupied units versus rentals; however, adequate reserves are becoming a serious obstacle when the vacancy percentage is high due to foreclosure or bank owned property.
TO CLARIFY THE CURRENT FHA CONDO APPROVAL/RECERTIFICATION PROCESS PLEASE SEE BELOW:
FHA Condominium Project Approvals Expiration Dates Extended:
FHA announces extension of condominium project approvals with an expiration date of December 7, 2010. Provided below are the extension dates based on five-year time frames with the exception of those condominium projects with original approval dates from 1972 -1985.
Initial Project Approval Dates Current Expiration Date New Expiration Date
1972 - 1980 December 7, 2010 December 31, 2010
1981 - 1985 December 7, 2010 December 31, 2010
1986 - 1990 December 7, 2010 May 31, 2011
1991 - 1995 December 7, 2010 July 31, 2011
1996 - 2000 December 7, 2010 August 31, 2011
2001 - 2005 December 7, 2010 September 30, 2011
2006 - 2008 (Sept) December 7, 2010 March 31, 2011
The extensions were granted to reduce the impact of processing and reviewing the number of project approvals expiring at the same time while recognizing current housing market conditions. Lenders and/or other interested parties are encouraged to begin the re-approval or recertification process as early as possible as it is not anticipated that any further extensions of project approvals will be issued.
The Condominium look-up page and the FHA Connection databases were updated on December 7, 2010 and now reflect the extended expiration dates. The links to the sites are:
Condominium look-up page: https://entp.hud.gov/idapp/html/condlook.cfm
IN ADDITION, IF THE CONDO IS STILL ON THE APPROVED LIST THE UNDEWRITER IS RESPONSIBLE TO RECERTIFY THE CONDO AND WE STILL NEED THE FOLLOWING DOCUMENTS:
1- Updated Completed Condo Questionnaire to make sure it still qualifies
2- Current Budget
3- Master Liability Insurance with a minimum of $1,000,000 coverage
4- HO6 Policy
5- UW to Complete Condo Recertification form
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Deborah "Dee Dee" Garvin
NMLS #279125
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Good morning Deborah,
Great post! The everchanging FHA condo rules can cause a glitch in your buyers choice of a condo! Thanks for the concise update.
Dorie, You are welcome! I am very grateful to have an underwriting department that keeps completely abreast of changes and pushes information out to the field as timely as possible. There is absolutely nothing about mortgage finance that can be accomplished as a "one man band"....any MLO (no matter the experience level) is only as good as the people in the back room.
Deborah thank for sharing this information it is worthy of a reblog and as your comment stated we are only as good as the back room!
I am glad HUD gave the extension last month. All of those projects expiring at the same time was a disaster waiting to happen.
This is so timely, Deborah. I have a couple looking at an FHA condo purchase. Not so easy. The link above does not work. The one I have been using is: https://entp.hud.gov/idapp/html/condlook.cfm. I am going to pass this along to my buyers. Thanks.
Deborah:
Thanks for your post on my blog. Good post here. Thanks again.
I hear there are even rich condo associations that are lending money to condo associations that were hit hard by foreclosures.
Many decades ago when I was a real estate agent in Houston, we didn’t have to worry about whether or not a condo community was approved. I do wonder when I hear about this just exactly what the requirements are to get approved.
Just stopping by to invite you to the 2nd Annual ActiveRain Super Bowl Party. Hope you’ll come and bring some friends!
Dang the re-blogging is still off. This would have been one I would have liked to re-blog. Oh well. Thanks Donne for keeping us up to date.
I've been told that there are no lenders doing spot approvals anymore for FHA condos and that is a thing of the past. Which is too bad. Condos are tough enough to sell in the Sacramento area.