http://www.batonrougerealestatebuzz.com/ - Baton Rouge Real Estate Buzz: The ABC’s of Greater Baton Rouge FHA condo requirements. The Chicago Tribune News takes a look at the comprehensive condo approval process!
As of Feb. 1, associations with two or more units must be FHA-certified before the agency will back a mortgage. The previous policy of allowing one-time, or “spot approval,” for individual units was rescinded.
While it’s not the FHA home appraiser’s responsibility to determine if a condo project is approved for mortgage lending, it is good to know the actual FHA criteria for an approved condo project.
The article is located here and here are some snippets:
“Among the certification criteria:
–All units and common elements must be completely built.
–No single entity can own more than 10 percent or more than one of the units, whichever is greater.
–At least 50 percent of the units must be owner-occupied.
–No more than 15 percent of the units can be more than 30 days delinquent on assessments.
–No more than 25 percent of the total floor area can be used commercially.
–At least 10 percent of the annual budget must go to reserves.
–The right of first refusal is OK as long as it isn’t used to discriminate.
In addition, associations must submit copies of their budget, insurance policy, declaration and bylaws, plat of survey, any management agreement, analysis of outstanding or pending litigation, and minutes from the last two meetings.
Associations can become certified in one of two ways. The first is to wait for an FHA buyer to come along and let the buyer’s lender do the work. Certain lenders, typically the largest ones, are eligible to certify associations under the Direct Endorsement Lender Review and Approval Process, or DELRAP. The association supplies the necessary documents and information.”
To Read the entire article, visit The ABC’s of FHA condo requirements