FHA Certification Assistance Program
Now available to all Condominium Associations! As well as those who have contracted with Community Archives for their Re-Sale Processing. For a brief introduction to the topic, you can also check out our brief video by clicking here.
What is the FHA?
The Federal Housing Administration, of FHA, provides mortgage insurance on loans made by FHA-approved lenders throughout the United States. FHA mortgage insurance provides lenders with added protection allowing for broader loan options. All loans must meet certain requirements established by the FHA to qualify for insurance.
The FHA has been in the news recently regarding a number of “rule changes” to their loan underwriting guidelines for condominium associations. Effective February 1, 2010, condominium associations must be certified “Approved” by the FHA in order for owners/buyers to qualify for FHA loans. Condominiums currently certified under the FHA guidelines will be required to recertify every two years. These new rules relate solely to condominiums and will not affect Homeowners Associations.
Decisions You May Be Facing
As a condominium association board of directors, you have a number of options and decisions to make regarding this matter.
Is FHA Certification necessary? The industry consensus is that it is desirable to attain and maintain FHA certification to ensure that your owners and buyers have the full complement of financing options available to them. Given the challenging nature of the marketplace, FHA certification can be essential for many buyers and sellers.
By making it easier for sellers and buyers within your community, the FHA provides huge economic growth across the country in the form of home and community development, which benefits local communities in the form of jobs, building suppliers, tax bases, schools and other types of revenue.
Who is responsible for doing it? There are a number of varying opinions from association attorneys, lenders, sellers and buyers as to the responsibility for FHA certification and possible strategies which a condominium board should consider.
There are two paths to FHA certification that your condominium association board should consider:
1. Do nothing as a board and let others, such as lenders, try to get the FHA certification for your association. (Officially called the Direct Endorsement Lender Review and Approval Process or DELRAP process). In this method the lender is the official applicant for your community and controls the process.
2. Apply for the FHA certification on behalf of your association. (Officially called the HUD Review and Approval Process or HRAP process). In this option the association is the official applicant and controls the certification process.
How Community Archives Can Provide You With Further Guidance
There is a significant amount of information to consider and you and your fellow condominium association board of directors contemplate FHA certification and tackling the certification process, which admittedly may seem like a daunting task. For this reason, Community Archives has created an FHA Certification Assistance Program to aid your condominium association through this process.
For more information please contact our FHA Certification Assistance Expert directly at FHAassist@communityarchives.com or by phone at 530-797-6855. Again, also please feel free to review a brief explanatory video of FHA and how we can assist.
Find out if your Association is FHA approved:
Community Associations Institute FHA Guideline Review
Mortgagee Letter 2009-46 A
Mortgagee Letter 2009-46 B
Mortgagee Letter 2011-22