Most mornings, I start my day scrolling through the news and social media to catch up on what’s happening in the world. After that dose of reality, I check what’s going on in the HOA space — especially anything related to mortgage lending, FHA, or Fannie Mae.
Lately, the headlines have been filled with FNMA blacklists, the government shutdown, fluctuating mortgage rates, and proposed housing legislation. I like to keep my pulse on what’s happening and what could happen in the future.
Today, one post in particular caught my attention:
“Our HOA didn’t renew their FHA loan eligibility. We’re in the process of refinancing and were just told they let it lapse.”
In this case, the homeowner needed to refinance to replace a broken furnace — an urgent repair — and suddenly discovered they couldn’t. Their HOA had quietly allowed its FHA approval to expire and hadn’t told anyone.
What struck me wasn’t just the issue of FHA Approval lapsing and affecting a homeowner. What got me the most was how familiar it felt — like my own personal Groundhog Day.
I’ve been reading posts like this for 15 years and taking daily phone calls from homeowners facing the exact same issue. The concept still hasn’t caught on. The conversation about maintaining FHA Certification and FNMA eligibility — and understanding how mortgage financing impacts a community — has never gained the same traction as topics like reserve studies or insurance requirements.
So I’m going to figure out how to get the message out there. I’m on a mission to educate. And since the government is shut down, I have the time to do it.
The FHA Condo Certification Problem That Never Goes Away
If you spend any time on Reddit or X reading about HOA or condo financing issues, you’ll notice the same story pop up every few weeks — sometimes even more often:
“Our HOA didn’t renew its FHA approval, and our buyer had to back out at the last minute.”
“My community was FHA certified when I purchased, but the board never renewed it—or told anyone.”
“My elderly mother wants to stay in her condo, but it’s not FHA certified, so she can’t get the reverse mortgage she and my dad planned for.”
It’s a more common (and costly) problem than most people realize. And it can quietly derail home sales, refinancing plans, or retirement goals overnight.
In the past, many boards shrugged it off. Homes were selling fast, and buyers had plenty of conventional loan options, so FHA approval didn’t seem important.
But times have changed.
Between rising mortgage rates, tightening Fannie Mae (FNMA) project standards, skyrocketing insurance costs, and new mandatory structural inspection requirements, many borrowers are suddenly finding themselves without viable financing options.
For years, FNMA’s “limited review” program made condo loans relatively easy for qualified borrowers. Now, with the introduction of stricter condo guidelines — and thousands of projects landing on Fannie Mae’s ineligible (“blacklist”) list — more and more buyers are looking for a backup plan.
That’s where FHA comes in. FHA loans often carry slightly lower interest rates than conventional loans, though the required mortgage insurance can make the monthly payment a bit higher. Still, if FNMA financing isn’t available and the community isn’t FHA approved, borrowers are left with only Non-QM mortgages — loans that typically carry interest rates at least a full percentage point higher.
Imagine you could buy a condo with an FHA loan at 6% today, but since the community isn’t approved, you’re forced into a Non-QM loan at 7% or higher.
And when that happens, you can count on frustration. Deals fall through, buyers walk away, or they demand price reductions to offset higher borrowing costs — lowering property values for everyone in the community.
All of this reinforces a simple truth: when communities ignore or delay FHA renewal, it rarely feels urgent until it suddenly becomes everyone’s problem.
The Bottom Line
What seems like “one buyer’s issue” can quickly ripple across the entire community, affecting resale values, appraisal comparisons, and even future financing options. The financial impact might not show up right away — but when it does, it’s usually too late to fix in time.
If your HOA’s FHA approval has expired, now is the time to renew. It’s faster and easier than most boards realize — and the benefits reach every homeowner.
Need help with FHA Condo Certification or renewal?
FHA Review has helped thousands of associations nationwide navigate HUD’s approval process quickly and accurately.
📞 Call: 714-536-6500
📧 Email: natalie@fhareview.com
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