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FHA Tips: Fidelity Insurance

When the Federal Housing Administration (FHA) is reviewing a condominium association’s application for certification, there are serval criteria that can trigger an immediate rejection. In our work with clients, the most common issue we see is the association’s fidelity policy falling short of FHA guidelines.

What are FHA’s Guidelines on Fidelity Insurance?

FHA requires that a condominium association have fidelity insurance for a sum no less than a sum equal to three months aggregate assessments on all units plus reserve funds, unless state law mandates a maximum dollar amount of required coverage.

Where do Associations Miss the Mark?

While most associations carry fidelity insurance - which covers incidents of theft of association funds - slightly more than half of the applications processed by Associa FHA Assist don’t meet this criterion. As a result, such applications cannot be approved until the fidelity coverage is adjusted in compliance with the FHA requirement.

If your community is interested in applying for FHA certification, it’s a good idea to make sure the fidelity coverage meets the FHA limits or any limits imposed at the state level. This will help ensure that any application is approved in a timely manner.

Interested in FHA Condo Approval?

If you are interested in FHA condominium approval, Associa FHA Assist can help. Please contact Natalie Ayers at


About the Author

As senior vice president of external affairs, Andrew oversees Associa’s public affairs, media relations, government affairs and corporate citizenship efforts. Bringing more than 20 years of experience in the public and government affairs arena, Andrew’s focus is working with Associa’s clients, industry colleagues and business partners to ensure a vibrant future for client communities and Associa employees.

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