FHA Condo Changes

There is a lot that is covered in the new mortgage letter.  Here is the biggest one, “Right of first refusal is permitted unless it violates discriminatory conduct under the Fair Housing Act regulation in 24 CFR 100.”

Spot approvals have been eliminated.  A spot approval is for a condo unit that is not an FHA approved condo project.  It would allow you to get the condo unit be purchased on its own.

“In accordance with the passage of the Housing and Economic Recovery Act (HERA) of 2008, the Federal Housing Administration (FHA) is implementing a new approval process for Condominium Projects to insure mortgages on individual units under Section 203(b) of the National Housing Act.  FHA will now allow lenders to determine project eligibility, review project documentation, and certify to compliance of Section 203(b) of the NHA and 24 CFR 203 of HUD’s regulations.  HUD will continue to maintain a list of Approved Condominium Projects.  The requirements of this Mortgagee Letter are effective for all case numbers assigned on or after October 1, 2009 except as noted…

To read this mortgagee letter and any attachments in their entirety, please visit: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/