FHA Condo Approval Q&As
If your condominium project does not meet the criteria listed for approval, don’t worry! We have helped countless condominiums overcome the challenges of not having specific criteria in order to get them approved. Our team is well-versed in the requirements for different types of approvals and can help guide you through the process of making necessary changes and updates to ensure your project is approved. Contact us today to learn more about how we can help.
FHA loans have become a major part of the mortgage market, insuring nearly half of all condo mortgages. Properties without FHA approval may face longer sales periods and even price declines as buyers are limited. As a result, many real estate agents won’t show properties without FHA approval.
The FHA is reviewing the status of all condo projects every three years in order to reduce the number of defaulted loans and minimize the amount of bad mortgages the government must pay for. This is particularly important in states like Florida, Nevada, and Arizona that have seen high losses from insuring bad condo mortgages in the past.
The FHA’s original records for condo projects are limited, and some don’t even have accurate contact information for the project. It’s the responsibility of the project to keep track of its status and recertification requirements.
Your complex’s expiration date is based on its last approval date. Approvals are valid for 3 years and then require recertification. You can check the status and expiration date of your project at https://entp.hud.gov/idapp/html/condlook.cfm.
The FHA will accept recertification applications as soon as six months before the expiration date. It’s recommended to determine any potential issues early and address them before the expiration date. If conditions are likely to improve, you may want to wait until closer to the expiration date. However, if conditions may get worse, it’s best to apply as soon as possible
If the deadline is missed, your complex will be marked as “expired” in the FHA’s system and no new case numbers will be available for subsequent unit sales. This can eliminate a significant portion of all potential sales from being eligible for FHA mortgages.
Yes, but it’s important to make sure everything is done correctly in order to avoid denial or having to start the process over. The FHA prefers to work with consultants like us as it makes the process more efficient and allows for quicker approvals.
Many of the original documents such as declarations, CCRs, and bylaws may be filed with the local county clerk’s/recorder’s office and can be downloaded from their websites.
If the Condominium Project was rejected or withdrawn under HRAP within the previous 12 months, FHA will consider it for reconsideration upon submission of corrected or updated documentation. However, if the rejection or withdrawal took place more than 12 months ago, a Full Review will be required. If the Condominium Project was rejected under DELRAP, it will require a Full Review under HRAP.
In this case, a Full Review will be required.
If the Condominium Project was rejected under DELRAP, it will require a Full Review under HRAP.