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Old 02-02-2010, 06:33 AM
 
Location: Philadelphia suburbs
43 posts, read 198,404 times
Reputation: 43

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According to the latest news, FHA condo "spot approval" has gone away, effective yesterday. Does anyone know what the process is to get a condo complex approved? Does it have to be initiated from property management/HOA? How long does it take?

The association I live in is not currently FHA approved, and from everything I have been able to find, it hasn't even applied for approval (it is a relatively young association - almost 5 years old). I am currently trying to sell and am concerned about losing potential buyers. My agent is out of town until Friday and I'm just trying to gather info right now.....TIA!
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Old 02-02-2010, 07:08 AM
 
Location: Tempe, Arizona
4,511 posts, read 12,299,537 times
Reputation: 2197
Here's the FHA mortgagee letter that discusses the new condo approval process:

http://www.hud.gov/offices/adm/hudcl...s/09-46bml.pdf

The letter indicates Dec 7th as the effective date, but it got moved to Feb 1st.

Basically, it's up to lenders to initiate the approval process:

FHA will now allow lenders to determine project eligibility, review project documentation, and certify to compliance with Section 203(b) of the NHA and 24 CFR 203 of FHA’s regulations. FHA will continue to maintain a list of approved condominium projects. Lenders will be required to retain all the project legal documents, contracts, conveyances, plats, plans, insurance coverage, presale and owner occupancy conditions and other documentation in connection with their review and approval of the condominium project.
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Old 02-02-2010, 07:36 AM
 
Location: Philadelphia suburbs
43 posts, read 198,404 times
Reputation: 43
Well that's somewhat good news, I guess. Thanks!
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Old 02-02-2010, 09:31 AM
 
845 posts, read 2,124,268 times
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No single entity can own more than 10% of the units. It can't be less than 50% owner occupied. It can't be more than 25% commercial for mixed use. Good luck.
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Old 02-08-2010, 07:49 PM
 
Location: Colorado Springs, CO
1,570 posts, read 5,475,436 times
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rjrcm is correct. If the condo complex is not currently FHA approved, it's up to the lender to gain FHA approval. That said the approval is reviewed with each new FHA loan. In other words an FHA approved complex may loose it's approved status upon review of a new loan.
Ask your broker to review the FHA guidelines and speak with the management - if s/he thinks the complex may be able to get FHA approval, s/he could put in it in the MLS. But understand if your complex was not approved before there maynot be much hope it will be now. FHA has tightened the guidelines for condos.
Best wishes.
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Old 02-14-2011, 12:19 PM
 
1 posts, read 9,048 times
Reputation: 11
I'm on the Board of Governors for my condo complex. About 7 months ago a mortgage company was trying to get an individual owner's unit FHA approved, but the sale fell thru so the mortgage company just dropped the ball, with no explanation, and they just stopped taking our phone calls.

Fast forward a few more months and I ran across an article re condo complexes, not individual units, needing to be FHA pre-approved. With this info I found our complex listed on the HUD site as being rejected due to "paperwork submission error or incomplete info".

I called FHA today, and I must say the clerk was far more personable than any government worker I've ever dealt with. She said the FHA office in my area (Santa Ana, CA.) had 2 days to respond and if they didn't then I was to call her back. Much to my surprise I rec'd an email reply within 1 hour. Of course the reply sent me for a loop.

My condo complex was rejected due to FHA needing "LETTER OF EXPLANATION ON PERSONAL INJURY LITIGATION".

I've lived there 22 years and we've NEVER been sued. I wrote back to FHA asking for whatever documents they had re this issue but have yet to receive reply.

QUESTION: Has anyone else rec'd such a rejection excuse from FHA?

TIA, Sydney

Last edited by sydneyesq; 02-14-2011 at 12:46 PM..
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Old 03-17-2011, 04:11 PM
 
1 posts, read 8,640 times
Reputation: 10
Default Fixed?

Quote:
Originally Posted by sydneyesq View Post
QUESTION: Has anyone else rec'd such a rejection excuse from FHA?

TIA, Sydney
Have you rectified this situation, Sydney?

Eric
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Old 03-18-2011, 05:10 AM
 
Location: MID ATLANTIC
8,047 posts, read 19,715,259 times
Reputation: 9091
I'm betting the management company had records of a management employee injured on the job and the claim wasn't closed.

Just as an FYI, Condo Associations need to have a tighter leash than they current have on their hired property managers. As a routine service - those managers should be updating the Condo's Board of Director's with the current Condo leter being provided mortgage lenders. This will alert them if any pending issues will prevent sales in their project.
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