FHA Extends Temporary Condominium Approval Guidelines
As expected, FHA extended the effective date of Mortgagee Letter 12-18 until August 31, 2016; the provisions in ML12-18 were due to expire on August 31, 2014.
At 5:21AM on August 30, I received an email notification that FHA released Mortgagee Letter 14-17. The sole purpose of the Letter was to extend the effective date of the ML12-18. No other changes were announced in the Letter.
Mortgagee Letter 12-18 announced a temporary easing of certain criteria regarding condominium project approvals. The modified guidelines have made it easier for many condominiums to obtain an FHA condo approval. Extending effective dates of these criteria is great news for condominiums looking to obtain a certification with FHA.
Why wouldn’t they extend the dates further or make the guidelines permanent?
That’s a great question imaginary audience member!
FHA is currently working on a comprehensive Handbook that will encompass all aspects of working with FHA from lender approval to loan underwriting to condominium project approvals to submission of loan packages for insurance. It will be a soup to nuts Handbook, so to speak.
FHA expects to have the Handbook completed sometime during 2015. At which time, I believe that the temporary guidance for condo project approvals as stated in ML12-18 will become permanent. Therefore, there is no need to extend the provisions in ML12-18 beyond the two-year period.
FHA has been consistently releasing draft sections of the Handbook for discussion. I expect that the condo project approval section should be released soon (before the end of the year.)
Related: Critical FHA Condo Approval Requirements to Sunset 8/31/14
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