In the past, FHA required a condo
project to be submitted and put on their approval list only once
(typically when the project was built) and it was considered an
approved project forever. If condo being purchased was not on the
approved list, then by gathering specific documents from the HOA,
HUD allowed lenders to do “spot approvals”. This ALL changes on
11/1/2009. Condo approvals are only going to be valid for 2 years.
Any condo project not approved on FHA’s approval list within the
last 2 years WILL EXPIRE on 11/01/2009 and FHA will NO LONGER allow
spot approvals.
If a condo project has multiple
“Phases”, EACH PHASE will need to be added to the FHA approval list.
The following are EXEMPT from the
condo approval list:
Project approval IS NOT required for:
• FHA to FHA streamline refinance transactions
• FHA/HUD Real Estate Owned (REO) sales
• Site Condominiums (free standing – no common wall
units)
Use the following address to look up projects at
HUD’s website:
https://entp.hud.gov/idapp/html/condlook.cfm
HOA’s are responsible for providing the
documentation to HUD to place and
maintain condo project approval status. The
information for obtaining project
approval is found in HUD Handbook 4150.1 Chapter 11.
http://www.hud.gov/offices/adm/hudclips/handbooks/hsgh/4150.1/index.cfm
If you are planning to sell or buy a condo and the
project is not on HUD’s
approved condo list, then closing will most likely
be delayed while gaining
approval OR denied all together if the HOA
documentation does not meet
HUD’s requirements.
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