Life just got a whole lot tougher in the wonderful world of condominiums. HUD recently announced that they are requiring all condominium projects undergo re-approval. This literally means that every condominium development that successfully underwent the previous process will no longer be approved and they must reapply for approval to be eligible for FHA loans. Needless to say if not managed closely by condominium boards, Realtors, lenders and sellers, this could result in a humungous mess.
There is Good News
The good news is that some developments will undergo an abbreviated process, which allow for only moderate inconvenience to those boards that are organized and that plan ahead. The date of original approval will define how stringent a process that the development will need to undergo.
The specifics of the requirements are as follows:
- If project initially approved prior to January 1, 2000, full project approval is required
- If project initially approved on or after January 1, 2000, then the project is eligible for the recertification process
- Projects may be recertified beginning six (6) months prior to the approval expiration date or within six (6) months after the approval expiration date
- Projects not recertified within six (6) months after the approval expiration date will require full project approval
- To determine date project was initially approved – can be checked in FHA Connection or on the public web site located at: https://entp.hud.gov/idapp/html/condlook.cfm
The important take away for this is that this can affect your listings and/or current deals if everyone is not fully aware of the changes and prepared to react.