FHA Condo Approval Specialist: New Level of Scrutiny in FHA Condo Project Approvals

New Level of Scrutiny in FHA Condo Project Approvals

wanamaker building philadelphia homeownership center FHANew Level of Scrutiny in FHA Condo Project Approvals

In February, we were saddened to learn of the retirement of the Chief in FHA’s Philadelphia Homeownership Center (PHOC).  We had a great working relationship with her and had met her in 2014 at the Round Table sessions in Washington DC.  A few weeks ago, she was replaced and since then, we have seen some changes in procedure and the level of scrutiny.

One of the major procedural change that has taken place is when a condominium project approval file gets rejected.  Previously when a file was rejected, we would submit the conditional documents and the file would go back in queue.  This meant that it would go back to the bottom of the stack of files and could take another 2-3 weeks to be reviewed...even if it was only one or two small documents.

Now, we are given 5 calendar days to submit the missing documents/information.  If we adhere to that timeframe, the file will stay in the process rotation and will be reviewed as if it were at the top of the pile.  The only problem with this is that we are almost always going to lose two days (the weekend) because it’s 5 calendar days, not 5 business days.  All of our rejections over the past month have come on a Thursday or Friday.

A reviewer in Philadelphia mentioned to us on the phone last week that the new Chief is particularly sensitive to the financials of the condominiums.  They are more highly scrutinizing condominiums which currently have a year-to-date loss or those who posted losses in the previous fiscal year.  Requests for letters of explanation regarding the losses, up to 3 previous years’ income and expense statements and year-to-date income statements have been requested of us to explain even small losses.

We have also been told that now all files have to pass QC, which can delay the processing time of the files.  The reviewer mentioned to us that the QC team is currently about a week out to review files.  This means that after the reviewer approves the file, it will take at least another week for QC to review it.


Eight of our ten submissions prior to the change were approved on their first pass.  Since then, 6 out of 8 have been rejected; 5 of them were due to financials.

The bottom line is to be patient when submitting FHA condominium project approvals to Philadelphia.  HUD sometimes makes internal changes that it doesn’t notify the public about.  We only learn of them when files get rejected for reasons which we have never seen.  This can delay processing times at first but once we adapt to the changes, they become standard procedure.


...until the next round of changes.

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 8 commentsReadySetLoan Condo Approval Team • July 09 2015 07:01AM


Hi Eric, I wonder if anyone else sees all the changes we have with everything you do and what mortgage companies have to do as a scheme to make fewer loans on real estate. Could this be the REAL purpose?

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) almost 5 years ago

Eric, I feel that the financials really do need to be looked at under a microscope. So many condo projects financials suffer and they way many report are not in compliance. At least that is my experience in Silicon Valley, CA.

Posted by Kathleen Daniels, San Jose Homes for Sale-Probate & Trust Specialist (KD Realty - 408.972.1822) almost 5 years ago

Eric I know that delays can be frustrating, but at first glance these changes make sense to me.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 5 years ago

Most of the condos in So. NH are not even trying to renew approval.  This if not the best news for buyers or sellers.

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) almost 5 years ago

Eric Boucher valid concerns for 5 Calendar days - however, what can you do?

And I think we are used to those changes which are never made public - and are surprise to us....

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners) almost 5 years ago

Hi Eric.  Don't you love it when the regulators keep moving the goal posts

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) almost 5 years ago

I love conspiracy theories, Bill Roberts 

Kathleen Daniels - I have seen many that mismanage funds and have turned a large number of them away.  When we choose to submit a file, we are confident that the condominium is in a good financial position.

Hi George Souto - actually, I had the pleasure of speaking with the new Chief yesterday after posting this and have to say that he has his act together.  He has cut the amount of time that reviewers have to review files and included QC in the procedure prior to approval.  HUD used to run QC on files 20-30 AFTER the files were approved.

Hi Joan Whitebook - I'm working on one in Southern NH right now.  It's a shame that more associations don't make a push to get approved.

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) almost 5 years ago

Praful Thakkar - actually, I was able to speak to the new Chief yesterday and he has cut the time allowed to reviewers to review files from 30 days to 20 AND the 5 day window is included in that.  Thus, the reviewer now has 15 days to review files and that is also based on calendar days.  I get the logic now.

Conrad Allen - it happens every now and again.  I just wish that there would be some kind of notification, especially to those of us who are submitting files on almost a daily basis.

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) almost 5 years ago