FAQ’s | About FHA Condo Approval 2014
As you are aware, there have been changes in the world of FHA financing, and it is affecting Condo Communities everywhere. Prior to 2010, communities were either already FHA condo approved (by the developer) or could be purchased using a “FHA Spot Approval”. The “Spot Approval” process was eliminated, and all Condos were given expiration dates for their FHA condo approval. Many HOA Boards and Property Managers are frustrated by these recent changes and have many questions regarding FHA condo approval. To help with the confusion we have put together a short list of the commonly asked questions regarding the FHA condo approval process.
What is FHA Certification for Condominiums?
FHA Certification is the method used by HUD (the Department of Housing and Urban Development) to ensure that Condominium Complexes meet detailed criteria to ensure that they are financially stable and managed properly. HUD uses the certification process as a risk management tool to reduce the probability of foreclosures on FHA insured loans on condominiums. This new “FHA Approval Process” is a detailed review of the Condominium Projects legal documents, financials, and overall health of the community.
Is this new?
The FHA condo approval process is not new, however it has changed considerably over the past two years. Prior to the changes, a Condominium Complex only had to become certified once – and the certification never expired. As an effect of the mortgage crisis, HUD required the FHA to give all condominium complexes expiration dates and develop a new set of guidelines. The most recent set of guidelines went into effect August of 2011, and the last set of expiration dates was September 30, 2011.
Is FHA Condo Approval Required?
No. Associations are not required by any law or statute to apply for FHA Certification. However, being FHA condo approved can greatly increase the marketability of units within your community and have a positive effect on overall value of your properties.
How long does the entire FHA approval process take?
The FHA condo approval process typically takes anywhere from 30 – 60 days, however this is timeframe is completely dependent on each HOA and their particular situation. Click here to review the entire FHA Condo Approval Process.
Why weren’t we notified of the expiration date?
The expiration dates were published on HUD website. HUD does not have a notification system in place. At fhareview.com we notify all our customers when renewal is required (every 2 years).
My HOA has a resident asking the Board to get FHA condo approval – why should the Board pay for this if it only benefits one homeowner?
FHA Certification benefits the entire community, even if there is only one unit up for sale. Since the buying pool is severely limited, chances are your Resident will need to lower their purchase price to attract buyers. The lower overall purchase price will affect the value of all units in your community.
How much does FHA Condo Approval cost?
$850.00 is the total cost. IF your community does not pass, you don’t pay. Its that simple!
Is there a difference in price between a new FHA certification vs. a re-certification?
No. The process is exactly the same. There is hardly any difference in the paperwork that we submit, so there is no reason for the price to change.
What required documents are needed for FHA Condo Approval?
for FHA Condo Approval, you will need to provide us with many documents. Click here to see the full list.
Will the FHA Certification expire?
Yes. Condo communities will need to re-certify for FHA approval every two years. There is currently no difference in the “re-certification” process, however in the future the FHA is planning to streamline it.
Feel free to contact us for additional information regarding FHA condo approval or the submission process.
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