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Condo | HOA Lawyers

Updated Condominium FHA Approval Rules By Nicholas J. Meinert, Esq.

Nick Meinert

On September 12, 2019, our office published a blog explaining the new FHA Condominium Approval Rules that became effective on October 15, 2019, which includes the single-unit approval process. The purpose of these new rules was to create more opportunity for individual condominium owners to obtain FHA insured mortgages. As many condominium associations are learning, this new process means more work for association boards and managers.

Specifically, the single-unit approval questionnaire contains several sections that are to be completed by the association or management. Based on the calls our office has received over the last few months, the computer software and websites designed to help associations complete other types of mortgage questionnaires does not provide all the information needed to complete the new FHA questionnaire. Boards should develop policies regarding the single-unit approval procedure that includes a reasonable fee paid up front and charged to the requesting owner for completing the questionnaire.

In addition, the new thirteen page HUD-9992 Form used for certifying and recertifying entire condominiums associations with FHA is significantly more burdensome than the previous two page recertification checklist. In conclusion, HUD’s new FHA rules and applications may open the door for more individual condominium units utilizing FHA insured loans, however, boards and managers can expect to spend additional time and resources in achieving certification for both the association and the individual owners.


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