Tag Archives: certification

FHA Certification – Mortgage Squeeze

Condominiums are feeling the pinch of the Federal Housing Administration’s new certification requirements as many find themselves ineligible for FHA approval.  That’s left owners and buyers without the option of cheaper FHA mortgages.

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Legislators hear both views of HOA boards

Last year, the N.C. legislature appointed the House Select Committee assigned to gather input from the public and recommend changes to laws that affect HOAs. The committee held several public hearings last year, and we saw some legislation passed – House Bill 165, which I discussed in my Aug. 19 column found here: bit.ly/pPRA4K.

The committee held another public meeting again this week to seek input from homeowners on what changes, if any, are needed to the laws governing HOAs. Some 45 homeowners from across the state spoke at the meeting – some were board members, others were simply concerned homeowners.

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Recent FHA Guidance on Condo Recertification

    Condominium projects must be certified by the Federal Housing Association (FHA) to be eligible for mortgages backed by the FHA. The FHA is the single largest mortgage insurer in the world; thus, the importance of FHA approval for condo projects cannot be overstated.

    Recently, the FHA released new guidance concerning the certification process. Getting a condo project approved is the first step, but maintaining certification is also very important. 
    FHA certification expires two years after the project has been approved. A condo project is eligible to seek recertification six months before the certification expires. If the project is not recertified six months after the expiration date, it must seek full certification. The determination of a project’s eligibility to complete the recertification process also depends on when the project received its initial approval.

Initial Approval Prior to January 1, 2000
Full certification is required

Initial Approval After January 1, 2000
    The project is eligible for the streamlined recertification process, which ensures the condo project maintains compliance with FHA standards. For recertification, the following documents are required:    

  • Cover letter
  • Financial documents (one of the following)
    • Budget
    • Reserve study
    • Fannie Mae Form 1037(a), Analysis of Annual Income and Expenses-Operating budge signed by an authorized individual
  • Management agreement (if applicable)
  • FEMA flood map
  • LOMA, LOMR or an Elevation Certificate (if applicable)
  • Evidence of required insurance coverage

For the full FHA recertification packet click here.

    This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

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