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|FHA Condos refer to the building projects that have been approved by the United States Department of Housing and Urban Development either through DELRAP or HRAP approval processing. Some of the major locations where one can find FHA approved condos include Chicago, San Diego, Brooklyn, San Francisco, Austin, Los Angeles, Seattle, NYC and Manhattan.
It is important to check the approval status of a condominium as FHA loans are available for approved condos only. You can search online at https://entp.hud.gov/idapp/html/condlook.cfm to check this status and find enough information to get a loan origination process started.
FHA Condo Requirements
FHA condo requirements have been outlined the latest issue of HUD guidelines. Under certain situations, such as when the guidelines do not match the State law, the project must be handed over to jurisdictional Homeownership Center for HRAP processing. It is necessary for a live/work project to meet the FHA standards and also comply with all applicable state law requirements.
The developer has to complete block 11 on form HUD 92541, which is commonly known as Builder Certification. Depending on the response of the builder it may be required to use form HUD 935.2C, which is specifically meant for condominium projects. Moreover, it is possible to resubmit a project in case of rejection.
The documentations must be submitted to the jurisdictional Homeownership where the condo project is located. The state-wise list of Homeownership Centers can be found at http://www.hud.gov/offices/hsg/sfh/hoc/hsghocs.cfm. Note that the new mortgagee letter has eliminated the provision of spot approval.
FHA Condo Loans
Except for FHA/HUD Real Estate Owned (REO) and FHA-to-FHA Streamline Refinance transactions, the project must be approved to get an FHA condo loan processed. The lender can check the condominium approval list on FHA Connection before accepting an application for financing. The lender may have their separate guidelines and probably a questionnaire to test the repayment capability of a prospective borrower.
Moreover, the lender must follow the FHA guidelines regarding owner occupancy, rental restrictions, reserve requirements, concentration limits and several other issues. It should be noted that the approval certification is granted for two years only, and after this period one needs to apply for recertification. FHA is soon coming out with a checklist that will be a great help for the lenders.
For more on FHA Condos, you must check the website of the United States Department of Housing and Urban Development (HUD). There are issues like budget, reserve and insurance requirements, expiration, conversion, code, fact sheet, delinquency, renewal and eligibility requirements that one might want to know more about. Here is the link to get the complete information resource.