The Federal Housing Administration published its policy guidelines and instructions that clarify the approval and recertification process for condo projects.
The mortgagee letter provides an implementation schedule of timelines for lenders to comply with the guidelines.
“Today, we institute revised guidelines that preserve FHA’s role in the condo marketplace during these difficult times while making certain we manage risk in a responsible way,” said FHA’s Acting Commissioner Robert Ryan. “This guidance formalizes and expands the policies we put in place in 2009 and lays the groundwork for a more formal rulemaking process going forward.”
According to FHA, the mortgagee letter consolidates guidelines published in 2009, provides a single source of information, and expands the agency’s flexibility to consider exceptions at the individual project level.
Condominium project approval can be issued by FHA staff or by lenders who have delegated approval authority. In addition, FHA’s Homeownership Centers will have greater flexibility to make determinations to address individual circumstances on a one-on-one basis.
The effective date is 60 days from the issue date of the mortgagee letter.