When Can We Apply for an FHA Condo Recertification?

When Can We Apply for an FHA Condo Recertification?

I receive many emails about the FHA Condo Recertification process and the timeframes that are involved.  These are some of the most common questions that I receive.

I heard that we had to apply for FHA condo recertification 6 months prior to the expiration.  Is this true?

No, this is not true.  FHA allows condominium projects to submit recertification packages 6 months prior to the expiration of the approval but not sooner than this.  It also allows 6 months past the expiration for the project to get approved without having to go through the whole approval process again.

At what point should we start the FHA condo recertification process?

We are recommending starting the process 2-3 months ahead of the expiration of the approval.  This way, if we run into any snags, we will have allowed extra time so that the approval doesn’t lapse.

What happens if our approval expires before getting recertified?

If the approval lapses no new FHA Case Numbers will be assigned until the project is recertified.  This means that no new FHA loans will be permitted in the project until recertification occurs.  It is possible to close FHA loans AFTER the expiration of the approval if the Case Number was assigned while the project was approved.

We are already approved.  Shouldn’t it be easy to obtain an FHA condo recertification?

This one is VERY common and doesn’t have a definitive answer, unfortunately.  I have worked with some that have been a piece of cake, while some others have had issues.

In the past two years, FHA has modified guidelines for condominium approvals several times.  Also, the reviewers have become more adept at processing the packages so items that may have been overlooked two years ago are being identified now.  Leasing language has been a culprit in recent months.

In addition, the condominium project could have posted large financial losses or not made the statutory contribution to the reserve account.  Either of these could create an issue in getting recertified.

What is needed for an FHA condo recertification package?

Actually, at present, all of the same documents that were supplied for the approval will be needed for the recertification.  In 2011 and 2012, FHA was not storing the submission packages electronically so documents such as the flood map and legal governing documents all have to be resubmitted for the recertification.

Now that FHA is using electronic storage, the required documents for the next recertification period will only consist of new and non-permanent items such as financial statements and recently-amended legal documents.

Please contact me if you have any questions regarding FHA Condominium Project Recertifications.

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