budget: That Doesn’t Count Towards the 10% Reserve Contribution
- 11/10/15 08:03 PM
That Doesn’t Count Towards the 10% Reserve Contribution It’s budget season for many condominiums who run on a calendar year and we have run across an issue with several of our clients and potential clients. Everyone knows that FHA (and Fannie/Freddie) require that a condominium contribute 10% of its budget to the reserve fund each year. So when don’t the contributions count towards the 10%? When the funds are already delegated to fund an existing liability. We have seen this many times but let’s take a recent example: A condominium client’s budget is $450,000 so the minimum that they should be transferring annually to … (10 comments)
budget: It’s Budget Season - Don’t Forget About Reserves!
- 10/09/14 02:41 AM
It’s Budget Season - Don’t Forget About Reserves! For many condominium association Boards of Directors, it’s budget season as the members work to produce a budget for the start of the new fiscal year in January. This is why we wanted to send out a quick reminder about the importance of funding the replacement reserve account. The agencies (FHA, Fannie Mae and Freddie Mac) require that a condominium association contribute a portion of its annual budget to the reserve account. Most commonly, this portion is 10%. In addition, the agencies do not like when the balance of the reserve account dips … (16 comments)
budget: FHA Condo Approvals – Financial Requirements
- 10/09/13 12:59 AM
FHA Condo Approvals – Financial Requirements After posting my article on Investor Ownership Requirements for FHA Condominium Project Approval, I received inquiries to post about the financial/budgetary requirements for FHA Approval. I wrote and posted an article about a very common issue that pertains to budgets. However, I haven’t posted an article that speaks directly about FHA’s financial requirements for condominium projects. This is the area of the project approval that can be the most subjective. All of the pieces lend themselves to the determination of a financially sound project. But what exactly does it take to be “financially sound”? This … (0 comments)
Tina is the Treasurer for a condominium project in Connecticut. She found me through my ActiveRain blog and contacted me well in advance of applying for a condominium approval with HUD. And it’s a good thing that she did! She had taken over as Treasurer following a gentleman who was “old school”. He had been the Treasurer for at least a decade and his accounting methods consisted of hand-written notes and budgets. Tina worked hard to bring the HOA into the 21st century and transferred everything into electronic formats. There were several … (5 comments)
budget: FHA Condo Approvals - Budgets
- 09/30/11 04:33 AM
FHA Condo Approvals – Budgets HUD released new guidance regarding budgets when it issued Mortgagee Letter ML11-22. Prior to this, the review of the budget was somewhat subjective in nature. I wanted to write about budget guidelines as it pertains to FHA condo approvals because HUD noted that more condominium projects are being Rejected due to budget issues than for any other reason. If projects understand what it is that HUD is looking for, it will alleviate a lot of the stress and make it easier for projects to get approved or recertified. HUD looks at the financial viability of the … (2 comments)
That Doesn’t Count Towards the 10% Reserve Contribution
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