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This is going to be fun - new HUD approval process for condo purchases is right around the corner. Heads up everyone!

By
Real Estate Agent with Keller Williams Realty - Lakeside Market Center


I normally write blog posts that are geared for my local consumers (Macomb County MI) but this one is going to affect all of us who have buyer clients using FHA for their mortgages and condo purchases.  (Please read HUD Mortgagee Letter 09-19 , HRAP/DELRAP, for all the specific details of the way HUD will approve - or not - a condo complex.) 

One of the websites that I rely on when looking for condos for my home buyers is  https://entp.hud.gov/idapp/html/condlook.cfm .  It's a nice look-up site for buyers and their agents to find out if a condo complex has been approved by HUD for FHA home buyers. 

Just a bit ago I went to the above site to look up a condo complex in my area because a new listing popped on the market that matched my buyers criteria and noticed that HUD had changed their screen/search function to reflect the changes that are coming to their approval process.  We now are being prompted in the first drop down box to search for HRAP/DELRAP approved condos, or pre-HRAP/DELRAP condos:


Condominium Approval Method
 
•    HRAP/DELRAP: New HUD Review and Approval Process (HRAP) or Direct
     Endorsement Lender Review and Approval Process (DELRAP).

•    Pre HRAP/DELRAP: Former approval process.

 Revised: September 1, 2009

 

**My understanding is that the new HUD approval process doesn't begin until October 1st, 2009 but it appears that HUD is ramping up for it.  You may want to check with your favorite mortgage lenders to find out if their underwriting process is going to make these changes before the October 1st deadline, as we saw with other program changes that started to take affect before "deadlines" actually occurred.  I'll be checking with my mortgage partners tomorrow so that there aren't any surprises for my current condo buyers.**

This year has been full of fun changes to our industry, hasn't it?



Another blog article a bit more specific about the changes coming to condo purchases using FHA mortgages:  Heads up everyone - we could be in for some fun!


Comments (6)

Mike Jaquish
Realty Arts - Cary, NC
919-880-2769 Cary, NC, Real Estate

Kris,

I saved the link, with gratitude that condos are a small part of our market.  Many of the complexes were already non-warrantable due to high NOO rates.

Sep 08, 2009 02:15 PM
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

I talked to my mortgage guy this AM and he has something cooking.  We are going to team up with an appraiser to get some pre-approved and then of course *I* am appointed to blog about it.  Yay me!

Sep 08, 2009 02:39 PM
Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re

I do have a few condos listed I need to check out the list. Thanks for the info.

Sep 08, 2009 03:38 PM
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

I heard the rules were changing in October, need to check out the condo's in my area. Here's hoping more communities can get approved. You know Ann Arbor has lots of condo's and the ones that have not been approved take FOREVER to sell.

Sep 09, 2009 12:09 AM
Kris Wales
Keller Williams Realty - Lakeside Market Center - Macomb, MI
Real Estate Blog & Homes for Sale search site, Macomb County MI

Mike,  we're going to be hit hard here by some of the other things that can exclude a complex from being warrantable:  Near a military base?  Near an airport?  How about that busy highway?   What fun.  Glad to hear that your area doesn't have that many condo complexes.

Renee,  That is an outstanding idea!  I'll be looking forward to reading about how it goes for all of you.

Terry and Bonnie:   Talk to your "go to" FHA lender also and see what they say about the start date.

Missy,   It's going to be fun around here.  So many changes, and from what I've been reading the paperwork to get a condo approved is going to be much lengthier.  (No quickie "spot approvals" anymore.)  Good luck.

Sep 09, 2009 01:47 AM
Anonymous
Jerry

I live in a 40 year old condo complex and some of our owners would like to either sell or get a reverse mortgage. How do we go about getting our building approved for FHA etc.???

Dec 07, 2010 12:10 PM
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