fha condo approvals: 9 Types of Condo Projects that Must be Reviewed by HUD/HRAP - 10/07/15 10:46 PM
9 Types of Condo Projects that Must be Reviewed by HUD/HRAP
While HUD allows lenders with Direct Endorsement authority to review and approve condominium projects on HUD’s behalf (DELRAP), there are 9 different circumstances where the condominium must be reviewed directly by HUD (HRAP).
Condominiums in Florida.  Due to the issues in the condominium real estate market in Florida, all condominium project approvals must be reviewed by the Atlanta Homeownership Center.
In Bankruptcy or Receivership.  The fact that the condominium project or the developer is in bankruptcy or receivership is not an automatic disqualification for project approval but it must be reviewed … (9 comments)

fha condo approvals: Trying to be Slick with Legal Language - 06/16/15 10:42 AM
Trying to be Slick with Legal Language
The packages for FHA condominium project approvals include the management agreement between the association and the property manager.  Most of them are about 8-12 pages, cut-and-dry, very simple and very easy to read and interpret.  But there are some that are just so tedious to read primarily because they are trying to be slick with the legal language.
Case in point: we reviewed the language of a 33-page [OMG] management agreement from 2012 and the paragraph about the term of the contract went like this…
“The Board appoints Agent exclusively to manage the Property for a period … (4 comments)

fha condo approvals: How Long Does it Take to Obtain an FHA Condo Approval? - 07/03/14 01:45 AM
How Long Does it Take to Obtain an FHA Condo Approval?
Although I receive this question almost on a daily basis, I haven’t taken the time to write it all down.  Scott Godzyk’s article How LONG will it take a home to SELL if it is listed today? inspired me to commit my response to writing.
As with Scott’s answer in his article, my answer to “How long does it take to obtain an FHA condo approval?” is the lackluster: “It depends”.
I know that nobody wants to hear that answer but providing the range of 3 weeks to 2 1/2 … (13 comments)

fha condo approvals: Dispelling Myths About FHA Borrowers - 05/31/14 09:41 PM
Dispelling Myths About FHA Borrowers
In doing research for an article that I am developing, I came across some more figures about FHA loans.  I have already written about how well FHA loans perform.  The quality control system that FHA has in place is effective at mitigating risk due to lender error or negligence.
This time, I located the origination trends of FHA loans and what I found will be fairly surprising to most.
FHA borrowers seem to have a stigma that they are low-income borrowers with poor credit.  Not only does FHA have nearly the same income qualifications as conventional … (20 comments)

fha condo approvals: This is the Perfect Career for Me - 05/21/14 10:40 PM
This is the Perfect Career for Me
Yesterday, a condominium attorney called to ask how certain leasing restriction language would impact an FHA condo project approval.
During the conversation, it dawned on me that this is the perfect career for me.  I get to do so many various aspects of business but not to the point where I would grow bored with any one of them.
I enjoy law even though reading some legal documents can be very cumbersome.  I am adept enough at it to interpret what is being said.  I have read so many condominium declarations that I have … (6 comments)

fha condo approvals: Real Estate Agents are Lazy - 05/16/14 11:28 PM
Real Estate Agents are Lazy
Well, not all of them.  Many of them are highly professional, perform their job to the best of their abilities and spend their time monitoring the details.
But the lazy ones…you know who you are.
This past week, I was compiling data for condominiums in South Windsor, CT.  I do this to search for contrasts in the sales of units that are in FHA approved condos and those that are not.  This is part of my marketing efforts as a means to dispel the negative myths about getting approved with FHA.
To do this, I compile … (21 comments)

fha condo approvals: Ten Condo Units that Don’t Exist - 05/08/14 11:37 PM
Ten Condo Units that Don’t Exist
In my business of FHA Condo Approvals, I get to see and hear about all kinds of unusual situations about condominiums.  While at a lunch meeting yesterday with an attorney-friend, he spoke about one very interesting issue that was recently uncovered regarding one of his clients, a condominium association.
But first, a little background…
To legally create a condominium, the developer will Declare the condominium project and a certain number of units by filing the Declaration on the town’s land records.  At that time, only the units that are declared are available for purchase because … (7 comments)

fha condo approvals: New FHA Guidance to Be Released on Private Transfer Fees - 05/07/14 08:17 PM
New FHA Guidance to Be Released on Private Transfer Fees
This week, Ken Harney released an article on Inman News titled Upcoming FHA Rule Could Squeeze Homebuyers and Sellers.  The topic of the article was new rules regarding third party/private transfer fees that FHA is expected to release next month.
According to Harney’s article, “Realtors, lenders and community associations are up in arms about forthcoming FHA rules that they believe could make mortgage financing more expensive – maybe even impossible – for large numbers of buyers and sellers around the country.” (Emphasis added.)
Personally, I like Harney’s articles and was even … (25 comments)

fha condo approvals: Trouble Comparing FHA's Loan Performance to Fannie Mae’s - 05/06/14 02:17 PM
Trouble Comparing FHA's Loan Performance to Fannie Mae’s
One of the most common objections that I hear from condominium associations about obtaining an FHA condominium approval is that they don’t want “those buyers” here.  While that is not phrased well, what they mean is that they think FHA borrowers are low income, low credit score borrowers… basically, people of low means…that could present a higher risk to the financial stability of the condominium association.
Because of this objection, I have been reviewing and compiling loan data from FHA to refute this.  I also wanted to compare the FHA data to that … (7 comments)

fha condo approvals: Do We Qualify as "Site Condos" in the Eyes of FHA? - 05/05/14 08:17 PM
Do We Qualify as "Site Condos" in the Eyes of FHA?
I bet that I field as many questions about “Site Condos” as I do for any other topic regarding FHA Condo Approvals.  Yesterday, I received a phone call from a gentleman whose condominium project consists entirely of detached units.  I sent to him an email with the questions located below to help to determine if his project is a site condo project.
For all intents and purposes, a site condo project has the “look and feel” of a single-family detached housing neighborhood that is under a declaration of condominium.  The … (7 comments)

fha condo approvals: And The Best Performing FHA Loans Are…Condos?? - 05/02/14 02:30 AM
And The Best Performing FHA Loans Are…Condos??
There is no question that HUD’s website is very expansive.  It is so large that it can be overwhelming for folks to simply access it and peruse through the forms, letters, handbooks, guidebooks, updates and lists, just to name a few!
For anyone interested, HUD has an area of the site called its Reading Room and is a centralized location where you can find pretty much anything that you want to know about HUD and FHA loans.
One nifty little piece of information that I located was the performance data of FHA loans as … (7 comments)

fha condo approvals: Co-Insurance for Condominiums...What?? - 05/01/14 10:28 AM
Co-Insurance for Condominiums...What??
Yesterday, I received a call from a property manager with whom we work to help his clients to obtain FHA Condo Approvals.  One of his clients that is currently on the FHA Approved Condominiums List was inquiring about the impact of co-insurance to their FHA approval.
The Association is working to renew its insurance coverage.  Because of the insurance claims that the Association has filed in the past few years, the only lines available are much more expensive than what the HOA is currently paying.  In an effort to save money, the Board of Directors was investigating an … (9 comments)

fha condo approvals: FHA Condo Approvals – Insurance Requirements - 04/30/14 08:41 PM
FHA Condo Approvals – Insurance Requirements
One of the facets of the application for FHA Condo Approvals is the scrutiny of the existing insurance policies.  This is done twice: at the project level and at the loan level.  The project level is when the condominium project as a whole is applying for FHA approval.  The loan level occurs after the project is approved and a borrower is applying for an FHA loan.
The requirements for insurance is the same on both levels, although an extra step is added at the loan level.
The basic requirements at the project level are as … (2 comments)

fha condo approvals: This FHA Stuff Has Been Terribly Frustrating! - 04/25/14 06:11 AM
This FHA Stuff Has Been Terribly Frustrating!
In mid-March, I received a call from Ed who found my ActiveRain blog.  He manages condominium projects in Florida.  One of the projects that he manages is due to see its FHA approval expire in May.  He contacted me with sufficient time to get the file processed and approved.
After talking with him for a little bit, he asked that I send a proposal to him, which I did that same day.  I didn't hear back from him so I called him and left him a voicemail.  A week later, I tried to follow … (2 comments)

fha condo approvals: FHA Condo Approvals Roundtable Quick Hits - 03/26/14 11:39 PM
FHA Condo Approvals Roundtable Quick Hits
This week, I was invited to attend a roundtable session in Washington D.C. as an industry expert for FHA Condo Approvals.  Here are some of the quick topics that were discussed at the session.
Non-incidental, long-term binding agreements providing income to associations is allowed by FHA and Fannie Mae to be used in the creation of a budget.  An example of this would be a lease for a cell phone tower on the association’s property.  These leases are generally for decades and provide stable monthly, quarterly or annual revenue for the association.  Thus, the association … (3 comments)

fha condo approvals: FHA Does Not Approve Master Associations - 03/26/14 11:36 PM
FHA Does Not Approve Master Associations
Last week, I was invited to attend a roundtable session in Washington D.C. as an industry expert for FHA Condo Approvals.  One of the topics of discussion was regarding Master Associations.  A master association is an association that reigns over a grouping of sub-associations.  All sub-associations affiliated with the master association are required to abide by the by-laws of the master association.
Master Associations are not approvable by FHA.  A common example would be a golf course community.  There might be condominiums and single-family homes on the golf course but each community and owner must abide … (2 comments)

fha condo approvals: Trip to HUD Headquarters in Washington D.C. - 03/26/14 04:29 AM
Trip to HUD Headquarters in Washington D.C.
This week, HUD is holding roundtable sessions with industry leaders regarding the policies and guidelines for FHA condominium project approvals.  Monday and Tuesday the sessions were with project consultants like me, and Wednesday and Thursday are sessions with lenders.  These sessions are by invitation-only and I was honored to have been selected as a consultant to attend.
The next several articles will be directly related to discussions held during the roundtable, but I wanted to talk about the trip itself first, which was terrific despite the snow.
I left on Sunday morning and had … (5 comments)

fha condo approvals: FHA Condo Approvals – Questions About Legal Documents Part 2 - 03/20/14 01:06 AM
FHA Condo Approvals – Questions About Legal Documents Part 2
Next week, I am attending a roundtable session regarding FHA Condo Approvals at the HUD Building in Washington, D.C.  Attendance to this session is by invitation-only and I am honored to be one of the chosen project consultants to attend.
Because we will have the opportunity to ask questions and offer our opinions regarding project approvals, I sent an email to the many property managers and condominium attorneys with whom we work.  The email requested questions and issues that they have run into with the project approvals.  One of the attorneys … (2 comments)

fha condo approvals: FHA Condo Approvals – Questions About Legal Documents Part 1 - 03/20/14 12:32 AM
FHA Condo Approvals – Questions About Legal Documents Part 1
Next week, I am attending a roundtable session regarding FHA Condo Approvals at the HUD Building in Washington, D.C.  Attendance to this session is by invitation-only and I am thrilled to be one of the chosen project consultants to attend.
Because we will have the opportunity to ask questions and offer our opinions regarding project approvals, I sent an email to the many property managers and condominium attorneys with whom we work.  The email requested questions and issues that they have run into with the project approvals.  One of the attorneys … (0 comments)

fha condo approvals: HUD Roundtable - What Questions Would You Ask? - 03/20/14 12:15 AM
HUD Roundtable - What Questions Would You Ask?
I am thrilled to have been invited to the March 2014 roundtable session conducted by HUD in Washington D.C.  The purpose of the roundtable is to speak with leading condominium project consultants and obtain feedback from the industry regarding the issues that we face in obtaining FHA Condo Approvals.
HUD will also be speaking to us regarding proposed changes to the guidelines and processing of FHA Condo Approvals and asking our opinions about how we think this will affect the industry.
HUD holds roundtable sessions periodically to gather information from those of us … (8 comments)