By Curtis G. Kimble.
The Federal Housing Administration (FHA) today released a revision to its condominium project certification requirements. There are a few changes to certain requirements that have been preventing or hindering associations that I’ve helped from obtaining FHA certification.
One change will certainly help regarding delinquencies. Now, no more than 15 percent of all units may be more than 60 days delinquent. Previously, the requirements prohibited 15 percent of the units from being 30 days delinquent, which was far too strict. The change to 60 days is much more realistic and logical.
The fidelity insurance requirements have been adjusted slightly for professionally managed associations and may make it a little easier to comply with these requirements.
Finally, the requirement that no more than 10% of the units could be owned by one person or entity has caused difficulty for many associations. That requirement has been changed for established projects. A single person or entity may now own up to 50% of the total units as long as 50% of the units in the project are owner-occupied, principal residence units.
So, the changes provide some limited and welcome relief, but not much, and they definitely don’t provide the broader changes or relief many associations were hoping for.
Remember, certification expires every two years and you’ll want to plan ahead a couple of months at least to arrange for applying for re-certification. Contact us to help your condominium association obtain certification or re-certification of your project. While it can be challenging to obtain certification, it’s certainly possible for just about every association, and the benefits are well worth it.