Tuesday, May 3, 2011

New FHA Condo Rules now in effect.

The FHA has always required that a condo be specifically approved for FHA lending. The government wants to make sure that the Condo Association is properly constituted and on a sound financial footing. Last year when high foreclosure rates started appearing in Florida and Arizona, FHA decided that all existing approvals needed to be re-certified during 2011.

Because FHA is such a big part of the mortgage market, Buyers and Sellers contemplating a condo transaction need to check the current eligibility of the property. This website shows all FHA approved condos including those with expired or pending approvals.

The renewal of an expired approval can be accomplished by certain authorized lenders.  The process is called DELRAP.  A renewal application sent directly to HUD is called HRAP. Condo Associations can also initiate a renewal but the process can be complicated.  Some Associations may be unwilling to incur the effort or expense.

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