What condo is approved and which condo is denied for FHA loans going into 2010?
Here is the break down from Colorado FHA expert Barbra Weade.
Note that the December 7, 2010 expiration date of the condo projects approved prior to 10-1-08 has been extended to staggered dates with the nearest expiration date now December 31, 2010 for all of the oldest projects. See copy of the announcement that came out below that gives the rationale of the new expiration dates and a no-password link to the look-up site for searching FHA approved condos. I was in on the conference call they had and there are some clarifications:
– So long as the case number is issued prior to the project expiration date, the loan may close within the validity period of the case number (provided all of the normal project review info is determined compliant). Indicated that the validity period of the case number is 6 months, but if no activity on the case number in the system within 4 months, will likely remove the case number. So recommend we get them closed within 4 months of ordering the case number OR have some activity of at least logging the appraisal.
– Condo Projects may be recertified within the timeframe of 6 months before to 6 months after the current expiration date of the project (exception of ones already submitted where expiration date is now more than 6 mos away will still be processed).
– HUD’s timing for their direct recertification processing (HRAP) is about 30+ days and may expand with volume and staffing. Note that if the project fully meets all recertification and FHA condo guidelines, and you have a loan in process or prospective loan in process, I can do this internally (DELRAP) within a much lesser timeframe (see info attached). Note that due to the cost and documentation required for the recertfication process this typically works best when the HOA is involved and willing to pay for the recert as a benefit to the project as a whole.
One major totally new item not fully clarified and not yet in writing, but being enforced:
– Condos will be rejected and unacceptable for HUD/FHA approval or recertification if they have any leasing restrictions other than a minimum lease term of 6 months. Stated that this has supposedly always been a requirement from the Housing Act for any property not just condos, but FHA is already now rejecting projects that have any other restrictions on leasing of units and will require an amendment to the documents to be acceptable. This also includes projects that have a limitation on the % of leased units and/or require the approval of the HOA to rent a unit. The written clarification and guidance is to come out in the near future.
Not a change to previous info, but a major item to note:
– Any FHA approved condo project that was initially approved prior to 1-1-2000 will NOT be eligible for recertification, but must be resubmitted for full approval as if never approved by FHA.
Source: BARBARA WEADE