As Memorial Day approaches, condo boards’ thoughts turn to sprucing up the common areas, planting flowers and opening the pool. But Spring also marks the start of the busy season for real estate sales. With the real estate market continuing to heat up, it’s important to make sure your condominium association is marketable to the widest range of buyers. So in addition to getting the pool in shape, it’s time to think about getting your association approved for Federal Housing Administration (FHA) financing. If you wait until a unit owner has an FHA-qualified offer, it may be too late!
A condominium association is required to have FHA approval before any FHA-backed mortgage can issued to a potential buyer from a lending organization. The process condo associations have to undertake is highly technical, and once the various documents are assembled and submitted to the FHA, it can take up to 30 days to get approval. That’s why an increasing number of condominium associations are being proactive and securing their approval before the summer sales rush.
To obtain approval, an association must meet certain criteria set by the FHA. Among these criteria are:
- A delinquency rate of no more than 15 percent of the units 60 days behind on their assessments
- 10 percent of the budget set aside for reserves
- At least 50 percent owner occupancy (waiver possible for lower percentage)
- Fidelity insurance equal to 3 month’s aggregate assessments plus reserves
- No leases for less than 30 days
- Adequate insurance covering common elements and public areas
- Copies of financial statements, budget documents and other items
Associa offers FHA approval services for its condominium board clients. Our team will work with your community manager to gather the documents needed to complete an application. We’ll also work with the FHA should any problems arise. We strive to make the process as easy as possible so that your residents can maximize the number of qualified purchasers for their units. Don’t wait until a resident loses a sale – apply today.
Want more information?
Read our free whitepaper, "A Guide to Getting Your Condo Association FHA Approval" now!
Ready to start the process?
If you are interested in learning more about Associa FHA Assist, please contact Natalie Ayers at Nayers@associaionline.com.
About the AuthorMore Content by Andrew Fortin