New Rules for FHA Mortgage Loans used to purchase a condominium.
HUD has recently revamped their requirements for approval of Condominium Projects for FHA mortgages. Almost all condominium projects will need to obtain a new approval under the new HUD/FHA guidelines. Once approved, the approval will be good for subsequent transactions. Current estimates are that the approval process will take between three to four weeks.
NOTE: FHA financing requires that the project is approved in order to obtain the FHA Case number for the purchase loan And the appraisal cannot be ordered until the loan transaction has received a FHA Case Number.
This means the following for the purchase of a condominium unit in a project that is not yet approved (which applies to most condominium projects):
1. Plan for longer escrow periods. Instead of a 30 to 45 day escrow, pla60 to 75 days.
2. Deadlines to remove Appraisal and Financing contingencies should be timed to allow for receipt of condo approval plus time necessary to order, delivery and review of the appraisal report. Instead of removing contingencies in 10 to 14 days, plan to add 30 days to contingency periods.
Good News for listing agents and sellers of a condominiums - the request for Approval of a Condominium project can be started now ! Condo Owners, their Associations and agents can get a head start on this process NOW!
If you would like information on the application process, please contact me. I can forward some information on what is needed and where to send the application.
Remember, HUD is a government agency and they do not handle incomplete paperwork very well.
Only a complete package should be sent – including the HOA Cert.
At this time, HUD is not charging any fee for the Condo Project Approval. The only cost will be for the HOA Cert and whatever else the HOA charges you for the paperwork.
Please keep in mind that this is an entirely new process and we may receive changes to the process from HUD as time goes by. I will be sure to keep you updated.
