Post by bobbiburke on Nov 19, 2009 16:34:34 GMT -7
Yesterday I received a call from one of your fellow colleagues wanting to know how to find out if a condo complex is FHA approved. Well, this is a good question when you are taking a condo or town home listing in today’s market OR representing a buyer. You can now all go to the following link:
entp.hud.gov/idapp/html/condo1.cfm If it is not on the approved or denied list it means it is not an approved complex.
The question also brings up a recent rule change concerning FHA condo loans. ALL FHA loans made on condos need to be “approved” by HUD before it can be made. In the past (or more accurately until this month) this could be done by a formal approval by HUD itself or by a 'spot approval' whereby the lender would review certain aspects of the condo complex for the purposes of making that one loan. HUD has now abolished the spot approval, and generally made the process more complex, while at the same time loosening some of the requirements. According to the information as of today November 3rd, the new processes are as follows:
• FHA will now allow lenders who are "Direct Endorsement Lender" 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.
• An Environmental Study will no longer be required in most cases.
• The Right of First Refusal will not longer be an issue.
• Spot Condo Approvals will be eliminated.
Please keep in mind, we send out a "condo questionnaire" as a standard part of the application process...... Even if a Condo is on the "approved" list, criteria may have changed and it may no longer qualify. High vacancies, under funded associations, lack of reserves, pending litigations, multiple units owned by investors, high ratio of non primary owners and other scenarios come into play. We are a "Direct Endorsement Lender" and will look at every possibility to try and make it work. The condo questionnaires are usually not returned timely..... and they command an up front fee to get them.
In addition, we have to also consider Fannie and Freddie approval for conventional loans..... Please see these sites as well....
Condominium Project Reviews - Freddie Mac
Accepted Condos, Co-ops, and PUDs
The more you know, the better equipped you are. We're all in this together! Call on me at any time. Michael Thomas
entp.hud.gov/idapp/html/condo1.cfm If it is not on the approved or denied list it means it is not an approved complex.
The question also brings up a recent rule change concerning FHA condo loans. ALL FHA loans made on condos need to be “approved” by HUD before it can be made. In the past (or more accurately until this month) this could be done by a formal approval by HUD itself or by a 'spot approval' whereby the lender would review certain aspects of the condo complex for the purposes of making that one loan. HUD has now abolished the spot approval, and generally made the process more complex, while at the same time loosening some of the requirements. According to the information as of today November 3rd, the new processes are as follows:
• FHA will now allow lenders who are "Direct Endorsement Lender" 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.
• An Environmental Study will no longer be required in most cases.
• The Right of First Refusal will not longer be an issue.
• Spot Condo Approvals will be eliminated.
Please keep in mind, we send out a "condo questionnaire" as a standard part of the application process...... Even if a Condo is on the "approved" list, criteria may have changed and it may no longer qualify. High vacancies, under funded associations, lack of reserves, pending litigations, multiple units owned by investors, high ratio of non primary owners and other scenarios come into play. We are a "Direct Endorsement Lender" and will look at every possibility to try and make it work. The condo questionnaires are usually not returned timely..... and they command an up front fee to get them.
In addition, we have to also consider Fannie and Freddie approval for conventional loans..... Please see these sites as well....
Condominium Project Reviews - Freddie Mac
Accepted Condos, Co-ops, and PUDs
The more you know, the better equipped you are. We're all in this together! Call on me at any time. Michael Thomas