FHA CONDO CHANGES AND GUIDANCE FAQs
FHA released a frequently asked questions (FAQ) document on the new condominium rules. The FAQs provide some additional guidance to the rules, announced in Mortgagee Letter 2009-46A and Mortgagee Letter 2009-46B.
On November 6th, the Federal Housing Administration (FHA) finally issued major changes to its revised guidelines on mortgage insurance requirements for condominium associations. The original guideline revisions were first proposed back in June (under Mortgagee Letter 2009-19). The new guidelines go into effect on December 7, 2009; however, some of the requirements are phased in through January 31, 2010.
For a new condominium to qualify for FHA financing the following guidelines apply, effective February 1, 2010:
50 percent of the total units must be presold before FHA financing is approved
50 percent of the total units must be owner occupied
No more than 10% of units may be held by a single investor
Unit owners must obtain individual HO-6 insurance policies if the master policy doesn’t cover interiors
Recertification is required every two years
Projects that received approval between October 1, 2008 and December 7, 2009 will be "grandfathered" and will have to follow the new guidelines’ recertification process. Because the Administration is extending the "Spot Approval" process through January 31, 2009, we highly recommend any association that was contemplating obtaining FHA certification to act without delay before the comprehensive certification process is enacted.
for more information contact me at 808-217-0429
Laure McElwee, Realtor S