Condominium Project Recertification a Must
January 5, 2012
Publication| Real Estate Services
In the past few years the FHA has revised its loan underwriting requirements for condominium projects. Under recently updated FHA rules, entire condominium projects must receive FHA certification before buyers and owners will qualify for FHA loans. As a result of the recent economic downturn, demand for FHA loans has increased and many residential condominium projects have chosen to obtain approval for FHA-insured financing in order to improve the marketability of the homes in that project. Both developers and association boards recognize the value to condominium owners of FHA approval for acquisition financing for potential buyers of those homes.
This past summer FHA amended its rules for certification, now requiring recertification every two years. These rules can be found in the Condominium Project Approval and Processing Guide (June 30, 2011). Projects that are already certified must seek recertification within six months of the current expiration date of their certification.
Relatively few condominium projects in Delaware are currently FHA-certified (a complete list can be found at https://entp.hud.gov/idapp/html/condlook.cfm). Condominium developers and association boards should look into certification if they believe it would help the sale and resale of homes in their community. If their community is already certified, they should be sure to file for recertification in a timely manner in order to avoid the time and expense of applying for a new certification.