FHA Condo Approval Specialist: FHA Condo Approvals – Rejected!!

FHA Condo Approvals – Rejected!!

FHA Condo Approvals – Rejected!!

In working with condominium projects for FHA/HUD condo approvals, something occurs very often: the project gets Rejected.

Let me explain what this REALLY means because Homeowners Associations have been pretty perturbed with me in the past.  This prompted me to notify the HOA’s that they can almost count on the project being Rejected prior to it being Approved.

When HUD receives an application package for a condominium project, it logs it and places it in queue with a project reviewer.  This is also when HUD sends out an email communication to the contact person.  The email says that it will take up to 30 days to review the file (although I haven’t seen it take longer than 3 weeks.)

If the package is incomplete or if the project reviewer requires more information, a “Missing Items” email will be sent to the contact person.  In it, HUD requests that the missing items be submitted within 48 hours of the issuance of the email.  If the missing items are not submitted within 48 hours, the project is Rejected and an email is sent to this effect.

I have had experiences when I have submitted the missing items within 48 hours – and had delivery confirmation to prove it! – and yet the project is still placed in Rejected status.  When I inquired with HUD regarding this, I was told that the missing items wouldn’t be reviewed for a couple of weeks anyways so I shouldn’t worry about the change in status.

Actually, the 48-hour window is really meaningless.  They could change it to 48 minutes and it would have the same effect!

The Rejection status is also meaningless in this situation.  If the missing items are submitted within 12 months of the issuance of the Rejection email, the project will be approved.

Of course, a project can be rejected if it is not approvable.  Happily, this has never happened to any condominium project with whom I have worked.

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 askeric@readysetloan.com or call me at 404-433-4565. I will be happy to answer any of your questions.


FHA/VA Condo Approval Specialist

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Comment balloon 6 commentsReadySetLoan Condo Approval Team • September 21 2011 10:34AM


I was curious how you are helping getting the condos approved? Are you working with the buyer as a mortgage agent or are you facilitaing getting the required paperwork to HUD by assisting the HOA companys.



Posted by Linda Edelwich, Glasotnbury Office's #1 Top Producing Agent-not on (William Raveis Real Estate) over 7 years ago

From what you are writing, it is my guess that these are new condo associations, as it seems more and more "seasoned" condos are being rejected due to too many being rented out.

Posted by Steven Cook (No Longer Processing Mortgages.) over 7 years ago

Thank you for your comments!

Linda: I am working with the HOA's in facilitating the process to get them approved or recertified with HUD.  At times, I work in direct contact with the property managers as well.  Incidentally, mortgage agents/loan officers are not allowed to submit application packages to HUD.

Steven: I have run into only a handful of older projects that have not been approvable due to occupancy issues and have had to turn them away.  Every project that I have submitted to HUD have been approved, the majority of which have been recertifications and not new approvals.

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) over 7 years ago

Approvals can be given to the complex only for the lender to reject it due to invester ratios exceeding the limit. A figure I never seem to remember.   Great information on the process, thanks for sharing.

Posted by Ross Therrien, Realtor, Broker Associate (Prudential Verani Realty, Londonderry,New Hampshire) over 7 years ago

Hi Ross, thank you for commenting.  Yes, it is possible for a condominium project to be approved with HUD and then have a lender reject a loan in the same project on the basis of the Owner-to-Investor ratio being lower than 50:50.

This may have happened a lot in the past but HUD's changes to condominium approvals should eliminate this happening almost entirely. Now that condominium projects have to become recertified every two years, those whose Owner-to-Investor ratios are lower than 50:50 will drop off the list.

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) over 7 years ago
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