FHA Issues Updated Condominium Approval Policy Guidelines and Requirements

August 2, 2011

On June 30, 2011, the Federal Housing Administration ("FHA") issued Mortgagee Letter 2011-22 which included a revised Condominium Project Approval and Processing Guide that consolidates and updates the requirements and procedures that constitute the Condominium Approval Process. Please click on the following link FHA to access copies of the Mortgagee Letter 2011-22 and the Condominium Project Approval and Processing Guide.

In the current economic climate, FHA approval can be an invaluable tool to ensure the success of your condominium project. If you have a new project under construction, or if in the planning phase, or if you are converting an existing rental facility to a condominium, Linowes and Blocher can assist you in the project approval application and submission process. If you manage or sit on the Board of an existing condominium association, Linowes and Blocher can assist in the recertification process to help ensure that your condominium remains eligible.

As an example of FHA's updated policies, FHA previously rejected applications for approval if the condominium governing documents included provisions intended to comply with affordable housing program requirements such as Montgomery County's MPDU program or Anne Arundel County's housing for the elderly of moderate means program, or if the condominium governing documents included certain leasing restrictions. FHA has addressed such issues in the new requirements and now allows more flexibility in approving projects that contain such restrictions.