Royal Villas Condos in Newington CT - Now FHA Approved!
We are pleased to announce the FHA Approval of Royal Villas Condominiums in Newington, CT. FHA loans may now be utilized to finance units in the community. Royal Villas brings the total to 12 condominiums that are FHA-approved in Newington.
The process to obtain the approval took longer than average. Royal Villas was denied approval from FHA in 2013 due to a leasing restriction. The restriction stated that a unit owner must own the unit for 12 months prior to leasing it. This is an attempt to keep investors out of the community. This restriction violates “free assumability” as it prevents the unit owner to dispose of his/her unit as he/she sees fit.
Understanding the need to obtain the FHA approval, the property manager contacted us in March to aid in the approval process. The first step towards approval was to amend the Declaration and By-laws to remove the leasing restriction.
Working with the association’s attorney, we assisted in drafting the amendment such that the language would be acceptable to FHA. The process of amending a legal document for this association required an affirmative vote of at least 75% of the unit owners and no objection by the mortgagees. If the revised language wasn’t acceptable to FHA, we would have to go through the amendment process again.
Once the vote passed and the amendment was recorded, a complete package was sent to FHA. The project was approved two weeks later and the Board of Directors could not have been more pleased.
Incidentally, there is an additional leasing restriction contained in the legal documents to limit the number of units that may be leased at any given time. The restriction states that no more than 10 units may be leased at any time. It goes on to say that an additional 7 units may be leased if the unit owner can provide evidence of financial hardship.
Note: While this may appear to constitute third party approval, it is acceptable to FHA because the first 10 units do not require Board approval.
Top Photo Credit: (c) Can Stock Photo / Arcady
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