FHA Condo Approval Specialist: Lender Won’t Close the FHA Condo Loan

Lender Won’t Close the FHA Condo Loan

Lender Won’t Close the FHA Condo Loan

We have discussed in a previous article that an FHA condo loan can still close even if the condominium’s FHA approval has expired.  That is provided, however, that the FHA case number was assigned to the loan prior to the expiration of the approval.  The lender must verify that the condominium was approved at the time the case number was assigned and sign a certification to that effect.

A unit owner called me yesterday who has his unit for sale and has located a buyer.  The expiration of the condominium’s FHA approval was last month.  The buyer is using an FHA loan and the purchase agreement was signed prior to the expiration of the FHA approval.  The unit owner was concerned that he would lose the buyer if the FHA recertification did not come very soon.

I asked him if the case number had been assigned.  All FHA loans are tracked by a case number, which is acquired by the originating lender or broker at the onset of the mortgage loan process.  Case numbers are assigned to the property, not to the borrower.

Case numbers are portable and transferable. They are transferable in that if an FHA buyer backs out of a loan and another steps in to purchase the same property, the case number is transferred to the new buyer.  It is portable meaning that it can move if the borrower decides to change lenders and still buy the same property.  This way, the borrower is not tied to any particular lender just because the case number has been assigned.

The unit owner’s concern about losing the buyer is apt.  However, there might already be a solution:

  • If the buyer’s case number was assigned prior to the expiration of the FHA approval, FHA will allow the loan to close.  We need to find out this information.

  • If it was assigned prior to the expiration, will the lender close the loan?  FHA will allow it, but will the lender do it?

  • If the lender does not want to close the loan until the condominium is recertified, find a lender who will.  I have heard of more than a half dozen FHA condo loans that closed AFTER the expiration of the condominium’s approval.

It is expected that the condominium will be recertified with FHA soon.  But if it isn’t, this unit owner may still be in luck if the case number was properly assigned even if the current lender is unwilling to close the loan.

Top Photo Credit: (c) Can Stock Photo / elenathewise

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.


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Comment balloon 19 commentsReadySetLoan Condo Approval Team • October 28 2014 01:30PM


Eric,  I just had one heck of a challenge getting a condo in contract because it was not on the FHA approved list.  Most buyers at that price point have FHA financing.  It's good to know that if the number is assigned before the approval expires ... there is still hope!

Posted by Kathleen Daniels, Probate & Trust Specialist, Probate Real Estate (KD Realty - 408.972.1822) almost 6 years ago

Eric this is a very important guideline that is not very well known.  It would be silly for a Lender to not allow this loan to close, it complies with the rules and does not pose any additional risk.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 6 years ago

Good morning Eric. Have one of these situations going on and we did have the case number in place. Great information that you shared with all of us, as usual.

Posted by Joe Petrowsky, Your Mortgage Consultant for Life (Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709) almost 6 years ago

Eric, It is little "nuggets" like this that make reading your blog mandatory.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) almost 6 years ago

I agree with George, Eric.  It'd be silly for the Lender to say No to a file like that ... I'm not aware of any Reverse Mortgage Lender with that overlay.

On the side, I recently learned I can originate an FHA loan in a condo complex that lost its FHA approval, if it's a HUD Home.  10 years originating FHA and I never knew that.  I attended a HUD Homes training session at the Orange County Association of Realtors this year, and learned it there.

Posted by Raymond Denton, Veteran Friendly Realtor® (Homesmart / Evergreen Realty) almost 6 years ago

Thanks for the information! I didn't know that the case number was transferable to a new buyer. Great tip!

Posted by Shelly Hendry (Keller Williams Realty Cityside) almost 6 years ago

Thanks for the great tip.  While it would be silly for the lender not to close, it also would not be surprising.

Posted by Jenna Dixon, Empowers You With a Better Real Estate Experience (DRA Homes | Cobb County Real Estate ) almost 6 years ago

Eric, you are sharing great info for Realtors as well as clients on this FHA process and ensuring the condo gets bought!  thanks again

Posted by Ginny Gorman, Homes for Sale in Southern RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) almost 6 years ago

I learned something new today. I didn't realize that the case number was portable. It makes sense, I did know that an FHA appraisal would outlast a buyer, so I can see how the case number would transfer as well. 

Posted by Karen Fiddler, Broker/Owner, Orange County & Lake Arrowhead, CA (949)510-2395 (Karen Parsons-Fiddler, Broker 949-510-2395) almost 6 years ago

Good information to know.

Posted by Nick Vandekar, 610-203-4543, Tredyffrin Easttown Realtor, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) almost 6 years ago

Eric- I was unaware of this until about a year ago; when a very thorough lender went above & beyond.

To this day I'm forever grateful. Many times there are solutions, but most people aren't interested in doing the extra leg-work...no matter how simple.

Posted by Adell Forbes (REALTOR®), "Knowledge & Experience Working for You" (PalmerHouse Properties ) almost 6 years ago

This transaction was SAVED by you!  Good job.  You knew information that was vital and you advised accordingly.

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) almost 6 years ago

Eric, the details....the details can kill a sale, and just as easily, save a sale.  "Just as easily" assuming the lender is down and dirty in the details.

Nice work.

Posted by Claude Labbe, Realty for Your Busy Life (Real Living | At Home) almost 6 years ago

Eric Boucher - I will be surprised if the lender decides not to close when FHA does not have any objection once the case number is assigned.

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners) almost 6 years ago

Thank you for your comment Kathleen Daniels .  I have been working diligently to spread this message!  Can you write an article about that?  I will post it to our site and spread it through social media :)

I agree, George.  It complies with FHA's rules but lenders don't always act logically.

Thank you for your comment Joe.  Hopefully, the lender doesn't give you a problem in closing it.

Thank you Bill.  That is a tremendous compliment.

Hi Raymond Denton - OCAR appears to be very actively promoting education about FHA and condos.  They posted a great video a couple of months back on the topic.  (FHA-FHA streamlined refinances are also allowed as are assumption transactions.)

I'm happy that the information was helpful, Shelly.

Hi Jenna - you're welcome.  It would be silly for the lender to not close it...but I wouldn't be surprised either.

Thank you Ginny.  I thought that many agents would appreciate this information.

Hi Karen - most people think that the case number is tied to the borrower and not the property.  I'm happy that you learned something new!

Thank you Nick and Trudy

Hi Adell - sounds like you found yourself a great lender!


Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) almost 6 years ago

Thank you Carla.  I hope everything works out for the parties.

Thank you Claude.  It is sometimes the little details that make all the difference.

I would be surprised too, Praful...but not too surprised!

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) almost 6 years ago

Hi Eric.  So frustrating when this happens.  Thanks for the info.

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) almost 6 years ago

Eric - you are a wealth of knowledge in this area. Your knowledge could certainly help save a sale.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) almost 6 years ago

Eric, I missed this one last year.  EXACTLY the kind of information that I needed today and appreciate your help answering my questions!

Posted by Liz and Bill Spear, RE/MAX Elite Warren County OH (Cincinnati/Dayton) (RE/MAX Elite 513.520.5305 www.LizTour.com) almost 5 years ago