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Friday
Sep212012

Federal Housing Administration Condo Update

The Community Association Institute (CAI) has reported that the Federal Housing Administration (FHA) has just released a revision of its condominium guidelines and the FHA has made temporary adjustments to its condominium standards in response to the current market conditions.

 

CAI's preliminary analysis of the FHA's policy changes are as follows:

1. Delinquencies - no more than 15 percent of units may be more than 60 days delinquent.  The previous threshold was a 30 day delinquency.

2. Employee dishonesty insurance - all new and established condominium projects with more than 20 units shall obtain and maintain employee dishonesty insurance coverage and must cover all officers, directors, and employees of the association.

3. Project certification - individuals submitting a condominium project for approval must certify that (a) all information in the request is accurate, (b) they have reviewed the project application and it meets all State and local laws and current FHA condominium approval requirements, and (c) they have no knowledge of circumstances or conditions that may have an adverse impact on the project.

4. Commercial space limitations - FHA will consider condominium projects with commercial space of between 25 and 35 percent for projects through the HRAP process only.  Mixed-use condominiums with commercial space of up to 50 percent will be considered, but requires substantial documentation.

 

For a further review of the updated FHA guidelines, please click here.

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