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FHA Approvals Expiring/Need Renewals

Posted on June 6, 2011 by "Condo Joe" Bryson in Uncategorized

Lots of changes going on with FHA condo approvals.  Virtually all condo complexes are going through a recertification process these days.  Before advertising your property as having FHA financing potential, it should be confirmed at:


Enter the state and at least the start of the complex name and city.  Select <all statuses> and see what the current status is for the condo complex in question.

If you are interested in getting reapproval for a condo complex there are 2 methods to get this done.  One is direct through HUD called HRAP, HUD Review and Approval Process and the other is DELRAP, Direct Endorsement Lender Review and Approval Process.   I have been told there is some potential liability for a lender that approves a complex using DELRAP, so there is not a lot of that going on.  Mostly the approvals are HRAPs.  This process takes some time, 1 to 3 months.  It does take the cooperation of the HOA management companies and the HOA Board of Directors.  I understand there are companies that are doing this for a fee, but with a little effort, an interested party should be able to get this done individually as long as they have the cooperation of the HOA.

Having FHA approval is very much a benefit, as long as the complex fits the loan limits of FHA (currently $288,750 in Travis County).  FHA allows a 3.5% down-payment, is more lenient in qualifying, has assumability potential for a future buyer, and parents can purchase a condo as “owner occupants” if a son, daughter, or direct blood relative is living in the property (that can be huge especially for “kiddie condos”).  The main requirement is owner occupancy vs investor owned in the complex.  Underwriting guidelines require at least a majority of owner occupants.  Some lenders may require a higher percentage, but that is the own guidelines and not what is required.

If your complex has recently lost its FHA certification and you are interested in getting more info on the process, send me an email and I will send you more information and some of the forms you will need completed.


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