FHA Condo Approvals – My Company’s Services
Recently, I have had many requests regarding my services and pricing so I decided to write an article that discusses both questions as well as the steps for processing FHA condo approvals and recertifications.
My company functions as a consultant to facilitate the process of approving or recertifying a condominium project with HUD. HUD is the governing body that maintains the approved condominium list. FHA is insurance for home loans and the Administration is housed within HUD, no pun intended. When a condominium project is approved with HUD, FHA loans are then available within the project. Without approval, these loans are not available, nor are USDA Rural Housing loans and CHFA loans (in Connecticut).
What I do is very similar to what I used to do as a mortgage loan officer for the past 9 years.
- I pre-qualify condominium projects to determine eligibility. I recently added this step in order to expedite the process. I collect basic information about the project such as the owner-occupancy ratio and if any investor owns more than 10% of the units. Basically, I am looking to see if there is a glaring issue that would prevent a project from getting approved or recertified. Just because a project is or was approved until recently doesn’t mean that it is still approvable!
The Homeowner’s Association and I sign an Agreement for my services that details what are the HOA’s and my responsibilities. The Agreement also provides a conditional money-back guarantee that the project will be approved with HUD. Along with the Agreement, I collect the retainer fee.
I work with the HOA and/or management company to collect all of the documents required by HUD for processing. This includes, but is not limited to, legal documents, management agreement, FEMA flood maps, details of pending litigation and financial information. Much of this paperwork comes from the HOA or management company, however, due to recent changes, all legal documents now need to be true copies of the recorded documents which many HOA’s do not maintain. I retrieve any documentation that the HOA or the management company does not maintain.
I review all of the documents provided to search for potential issues or items about which HUD may ask for further clarification. This includes reading the legal documents (which is tremendous fun) and reviewing the budget. Many times I am able to uncover potential issues prior to sending the submission package to HUD which reduces processing time.
I compile the file according to HUD’s liking and provide a cover letter with a detailed description of the project which reduces HUD’s processing time.
I maintain myself as the contact point should HUD require further clarification of details prior to approving or recertifying the project.
I keep copies of all paperwork sent to HUD.
I maintain a database of projects which I have assisted and will notify them in advance of their approvals’ expirations so that there is no lapse. (Approvals are good for two years.)
My Retainer for Services
My company charges a flat fee of $1995 for projects which have been completed for more than one year and Conversions that have been completed for more than two years. Proposed, Under-Construction and new Conversions (less than two years old) are on a case-by-case basis.
As HUD now requires true copies of all recorded legal documents, the $1995 retainer fee applies to projects that have only one legal phase. For projects with two or more legal phases, there is a surcharge of $75 per legal phase. This is only to cover my added expenses of obtaining the paperwork from the town hall. Town halls charge $1 per page for copies and amendments for a legal phase average around 75 pages.
This surcharge is obviously waived for HOA’s who maintain true copies of recorded legal documents, which some do.
Real Examples of Recertified and Approved Projects
Since February 2010, when HUD’s major changes began to take effect, I have assisted dozens of projects to get approved or recertified with HUD. During this time, not one of the condominium projects with whom I have worked has been Rejected by HUD.
The vast majority of the projects that I have helped are in my home state of Connecticut. However, I have helped a couple of others from outside of Connecticut including one in Boulder, CO. The guidelines for project approval are the same nationally so there are truly no boundaries for me to provide this service.
A partial list of clients in Connecticut includes 1776 Townhouses in Ellington, Bryrewood in South Windsor, Churchill Bridge #2 in Newington, Carriage Crossing in Middletown and Greenview Hill in Manchester.
Block 4 Dakota Ridge Residential Condominiums in Boulder, CO, was the most difficult to get recertified even though it was initially approved with HUD in 2004. This project was the victim of a policy change by HUD. The file was submitted to HUD in December 2010 and was Approved on January 12, 2011. However, on January 17, HUD subsequently Rejected the project!
When I was notified of this, I inquired with the project reviewer and he said that his supervisor rejected the project due to it having Affordable Housing and leasing restrictions. I spoke with the supervisor and then with her supervisor and was given a contact with whom to speak in Washington, DC.
Now, we’re getting somewhere.
From January 2011 until near the end of March 2011, I was in consistent communication with my contact in DC. It was during that time that HUD was investigating their policies regarding leasing restrictions and Affordable Housing. It wasn’t until March that it made final determinations on both. Once this happened, I requested that Block 4 Dakota Ridge be re-reviewed and it was approved.
The Condominium Project Approval Team at ReadySetLoan is dedicated to helping condominium projects across the nation to obtain their approvals with FHA and the VA or become recertified with FHA. We have assisted nearly 200 condominiums and we can help your association.
ReadySetLoan is an active member of the Connecticut and New England chapters of the Community Associations Institute (CAI) and is a frequent contributor to Common Interest Magazine as an expert in FHA/VA condominium project approvals.
Please contact us with any questions regarding FHA or VA condominium project approvals. You can email me at firstname.lastname@example.org or call me at 404-433-4565. I will be happy to answer any of your questions.
FHA/VA Condo Approval Specialist
404-433-4565 Cell Phone
860-644-3772 Fax Phone
Check out our article in Common Interest magazine on page 19!