Important Announcements on Condo Project Approvals!

FHA announced several changes last year to address changes in the Condo Project Approval process.  Changes included:

The elimination of “spot approvals”.  Meaning the entire project would have to be approved in order for a unit in that project to receive FHA financing.
The recertification of projects every two years.
As a result, Condo Projects that obtained their FHA approval status prior to October 1, 2008 (which is roughly 80%-90% of condo projects) will need to be recertified by December 7, 2010 or they will lose their FHA approval status.

HUD has not done a very good job at getting this message out to condo projects, lenders, realtors and everyone else that will be affected.  FHA case numbers will not be assigned in projects whose FHA approval has expired.

Types of approvals:

If a project was initially approved prior to January 1, 2000, a full project approval is required.

If a project was initially approved on or after January 1, 2000, the project is eligible for the streamlined recertification process.

Projects can start to be recertified 6 months prior to the expiration date or within 6 months after the expiration date and be eligible for the streamlined recertification process.  If a project waits longer then 6 months after their expiration date, a full approval will be needed.

Fortunately, Prosperity Mortgage is a FHA direct endorsed lender, which allows us on behalf of a condo project to submit the necessary paperwork for recertification or full approval and receive that approval within 7-10 business days from the time all documents are received.  This same process going through HUD directly takes 4-6 weeks.  Working with Prosperity provides the Agent a huge advantage over many competitors.

As agents, it would be a good idea to check with condo projects to make sure that they are aware of when their FHA project approval expires and if they have started the recertification process.

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