RISMEDIA, July 7, 2011—The Federal Housing Administration (FHA) recently published updated condominium policy guidelines and instructions that clarify the approval and recertification process and policies for condo projects. FHA’s mortgagee letter includes a Condominium Policy Guide and Implementation Schedule identifying timelines for lenders to comply with the guidelines.
“Today, we institute revised guidelines that preserve FHA’s role in the condo marketplace during these difficult times while making certain we manage risk in a responsible way,” said FHA’s Acting Commissioner Robert Ryan. “This guidance formalizes and expands the policies we put in place in 2009 and lays the groundwork for a more formal rulemaking process going forward.”
FHA’s mortgage letter and guide will:
• Consolidate guidelines published in 2009;
• Provide a single source of information for the Condominium Approval and Recertification Process;
• Update, consolidate and clarify existing condominium policy guidance; and
• Expand FHA’s flexibility to consider exceptions at the individual project level
Condominium project approval can be issued by FHA staff or by lenders who have delegated approval authority. In addition, FHA’s Homeownership Centers will have greater flexibility to make determinations to address individual circumstances on a one-on-one basis.
The Housing and Economic Recovery Act of 2008 (HERA) transferred FHA’s condominium mortgage insurance authority from Section 234 of the National Housing Act to Section 203, thereby requiring the issuance of updated administrative guidance as well as new underlying regulations. The Mortgagee Letter (ML) and Guide published today define the requirements for obtaining, recertifying and maintaining condominium project approval. Later this year, the U.S. Department of Housing and Urban Development (HUD) will publish proposed rules on FHA’s condominium program and seek formal comment from interested parties.
For more information please visit www.hud.gov.