Josh Mettle

Tough Times Ahead for Condos

FHA financing on Condo Projects is about to go from flood to trickle on October 1, 2009. These new guidelines announced in Mortgagee Letter 2009-19 will apply at that time:

• The spot approval process for condominium projects is eliminated.

• All current condominium project approvals will be invalid (with the exception of projects approved on or after October 1, 2008) and projects must be re-approved under the new options available. Going forward, all projects will require recertification every two years.

• There will be 2 approval process options:
1. HUD Review and Approval Process (HRAP)
2. Direct Endorsement Lender Review and Approval Process (DELRAP)
(This option is available only to lenders who have unconditional Direct Endorsement authority and staff experienced in reviewing and approving projects.)
• HUD will only accept approval packages for review from
o Lenders or
o Builders/Developers.

Getting projects back on the approved list will be a long and slow process. And until a project is approved, FHA financing is not an option. Early submission to beat the October rush is not allowed.
Now is the time to get those condo listings sold and your condo buyers off the fence!
Wondering what the new Project Eligibility Requirements are? Email me for a full list of the new requirements.