FHA Approval Huge Factor in Marketability of Units

 HUD Implements New Approval Process for Condominium Projects to Qualify for FHA Insured Mortgages.Website Allows Users to Search for FHA Approved Projects.

Florida condo HOA law blog

FHA 6/12/2009 rules
FHA will now allow lenders to determine project eligibility, review project documentation, and certify to compliance of Section 203(b) of the NHA and 24 CFR 203 of HUD’s regulations.

    1. HUD Review and Approval Process (HRAP).
    2. Direct Endorsement Lender Review and Approval Process (DELRAP), outlined in this Mortgagee Letter.
  1. Reserve Study – a current reserve study must be performed to assure that adequate funds are available for the funding of capital expenditures and maintenance. A current reserve study must be no more than 12 months old – if recent events or market conditions have affected the finished condition of the property that information must be included. When reviewing the reserve study, consideration must be given to items that have been replaced after the time that the reserve study was completed.  Page 6 Proposed or Actual BudgetManagement Agreement, if applicableOutstanding or Pending Litigation AnalysisPending Special Assessment Analysis  Attachment A

FHA Approved List of Condo’s


Condo Project File Checklist

Condo Worksheet

Main Link

HUD FAQ’s   i.e.  how to get approval

2) Q. How can I get a Condominium approved?
A. The guidelines for submission of Condos are set forth in HUD Handbook 4150.1 Rev-1, Chapter 11. Generally, the necessary documentation is submitted to HUD by a mortgage lender. Since most mortgage lenders are familiar with the information necessary for HUD to process the request, we strongly recommend that individuals, such as buyers and builders, use the services of a lender to make the submission. Copies of the handbook can be obtained from our Internet page at hudclips.org or may be ordered by calling (800) 767-7468.

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There are major changes on the way for developers of condo projects and existing condo owners who want to get approved for FHA financing. These changes are set to take place October 1st, 2009. But the ramifications are going to start being felt right away. The details are outlined in the Mortgagee Letter 2009-19 that was issued on June 12th by HUD. In this latest Mortgagee Letter FHA is announcing dramatic changes to their Condo Approval Process and the ELIMINATION of the Spot Approval Process. While these changes reduce the documentation and requirements for Full Condo Approval, it will place a lot more work and responsibility on Lenders.

Due to lenders changing their policies on condo lending you will need 20% to 25% down to purchase a condo unit using conventional financing.  The bottom line is if a condo building is not approved for FHA financing then your chance of selling a unit is almost impossible.




Valuation Analysis Home Mortgage

Search for Condo FHA Approvals  


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