FHA Condo Approval Specialist: FHA Condo Approvals – Another Happy Association!

FHA Condo Approvals – Another Happy Association!


FHA Condo Approvals – Another Happy Association!


Tina is the Treasurer for a condominium project in Connecticut.  She found me through my ActiveRain blog and contacted me well in advance of applying for a condominium approval with HUD.

And it’s a good thing that she did!

She had taken over as Treasurer following a gentleman who was “old school”.  He had been the Treasurer for at least a decade and his accounting methods consisted of hand-written notes and budgets.

Tina worked hard to bring the HOA into the 21st century and transferred everything into electronic formats.  There were several unit owners that were delinquent in the common charges and Tina worked with them to bring them all current.  In fact, she was so successful that at the time of the HUD submission, there was only 1 unit owner (out of 29) that was behind and for only a small amount.

She was delegated to get her project approved with HUD and was overwhelmed at what was needed.  She had reviewed the list of paperwork and contacted me for help.  After asking her several questions during our initial phone call, I asked for her to send me a copy of her budget and Income/Expense Statement.

After reviewing these documents, I made a few suggestions to bring their financials into alignment with HUD’s guidelines.

1.     Create a separate reserve account.  The Association only had one account in which it held all funds and “designated” some of that for replacement reserve funds.  That would not fly with HUD.

2.     Fund the reserve account with sufficient funds.  In talking with Tina about how much the HOA had in its account, what projects they had planned and how much was needed for operating capital, we decided on an appropriate amount to move to the reserve account.  HUD says that the minimum balance should never drop below 10% of the annual budget.  However, if the balance is only at 10%, this is not favorable and HUD could ask why it was so low.

3.     Create a line item on the budget to appropriate 10% of the budget to reserves.  Obviously, since the HOA didn’t have a reserve account, it wouldn’t have contributed money to it!  HUD’s guideline is there must be a line item that delegates 10% of the common charges to the reserve account.

4.     DO NOT touch the money in the reserve account!  This can be a major issue.  HUD does not like it when reserve funds are moved to the operating account to pay ordinary expenses.

There were other parts in play such as pending litigation against the association and an outstanding loan so we had to make sure to collect the proper documents and write letters of explanation.

Once everything was in order, we submitted the file to HUD.  It would have been approved on the first shot but the project reviewer missed a couple of items.  It took me a couple of weeks to finally reach the project reviewer (partly because he had been on vacation) and we were able to clear it up over the phone.

Tina was thrilled and I couldn’t have been more pleased.  I asked Tina if she would do me the honor to write a recommendation for my services on LinkedIn.com as I am trying to build up that profile.  She said that she would be delighted to do so.

The original can be found on my LinkedIn page.  If we aren’t connected on LinkedIn, reach out to me and I will accept your invitation!

Though I serve as the Treasurer of a small, self-managed condominium complex, I have no financial experience or background. With this in mind, seeking FHA approval for our complex seemed like a vitally important, but unfortunately impossible undertaking. That is, until I connected with Eric. He led our board through the process step by step and ensured we provided every piece of documentation required. He explained all the financial materials needed and helped me prepare what we currently did not have.

I'm sure Eric typically deals with professionals that have much more financial experience than I do. He had a vast amount of patience and never hesitated to answer all of my many questions. He went above and beyond - explaining what we needed to do to establish an appropriate reserve, assisting in preparation of a balance sheet, and helping us explain details of existing litigation and loans.

When a small challenge presented itself near the end of the process, Eric was persistent - following through and making all the calls needed. The last thing to be said is the positive result … the complex is now FHA approved thanks to Eric’s expertise and hard work”

I don’t make it a habit to “toot my own horn” but periodically I get a recommendation from a happy client that gets me so excited that I just want to share it with everyone!

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

404-433-4565 Cell Phone

860-644-3772 Fax Phone

ready set loan condo team


 CAI-CT logo

 Check out our article in Common Interest magazine on page 19!

Find Eric Boucher with ReadySetLoan Condo Team on Google+

Comment balloon 5 commentsReadySetLoan Condo Approval Team • August 05 2013 09:22AM


Another one for the win column, congratulations! The unit owners now have more marketable units which improves value for all.

Posted by Joe Petrowsky, Your Mortgage Consultant for Life (Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709) over 5 years ago

Eric you are not tooting your own horn, Tina did an excellent job of doing that for you.  Congratulations on assisting another condo complex get FHA Certification.

By the way I knew the condo budget needed to show at least 10% in reserves, but I was not aware the reserve funds had to be in a separate account.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 4 years ago

HI George - this is actually an article from last year but I updated the meta tags and it posted as new!  Most associations do keep their reserve funds in a separate account.  It's typically with the smaller associations that I see them co-mingled.

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) over 4 years ago

Eric, Toot, toot, toot!!!  Tooting and sharing are essential. 

Do not touch the money in the reserve account ... great advice even if it is not a HUD guideline. Too many associations play games with their budgets!  It's just WRONG!

Congratulations on a job well done!

Posted by Kathleen Daniels, San Jose Homes for Sale-Probate & Trust Specialist (KD Realty - 408.972.1822) over 4 years ago

Thank you very much Kathleen!

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) over 4 years ago