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On Behalf of HUD/FHA Welcome to our session on FHA Condominium Approval Process

On Behalf of HUD/FHA Welcome to our session on FHA Condominium Approval Process. Housekeeping Phone lines ~ Q&A ~ Polling Activities. Phone lines – muted Questions – Q&A panel Interactivity – voting tools and polling questions. 2. About Your Instructor…. Theresa Ballard. 3.

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On Behalf of HUD/FHA Welcome to our session on FHA Condominium Approval Process

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  1. On Behalf of HUD/FHA Welcome to our session onFHA Condominium Approval Process

  2. Housekeeping Phone lines ~ Q&A ~ Polling Activities Phone lines – muted Questions – Q&A panel Interactivity – voting tools and polling questions 2
  3. About Your Instructor… Theresa Ballard 3
  4. FHA Subject Matter Expert Welcome to our guestfrom FHA who will be responding to participant questions and offering additional guidance during today’s webinar 4
  5. FHA Condominium Approval Process 5
  6. Describe what HRAP is and how it works. Describe what DELRAP is, the approval process and how it works. How do HRAP and DELRAP differ? Discuss project denials and recertification process. Understand program eligibility. Discuss loan level requirements. How to get project information from the FHA system. Course Objectives 6
  7. HRAP vs. DELRAP Eligible/Ineligible Projects Documentation Requirements for Approval Recertification and Annexation Denied or Withdrawn Projects Unique Projects Loan Level Requirements Submission Package Logging How to Search for Approved Condos links References Retrieval Course Overview 7
  8. Polling Questions How long have you been reviewing condominium packages? What is your role in working with FHA condominium loans? 8
  9. Not all projects receive FHA approval HRAP vs. DELRAP Project Approval Processes NOTE: Applications can be sent by many sources i.e., Lender, builder, developer, HOA, management company, etc., but NOT the homeowner, borrower, seller, or real estate agents. Condominium Project Approval and Processing Guide 1.2 (June 30, 2011) 9
  10. Project Approval Documentation Requirements (HRAP and DELRAP) General Condominium Information Type and Year of Construction (Existing, New, Conversion, etc.) Condo Phasing, Composition Type of units (Detached, semi-detached, row, mid-rise, high rise, walk-up, manufactured, etc. http://portal.hud.gov/hudportal/documents/huddoc?id=11-22mlguide.pdf Appendix E 10
  11. Project Approval Documentation Requirements (HRAP and DELRAP) Ineligible projects include: More than 25% total space non-residential (unless exception granted) Mandatory rental pooling Owner occupancy restrictions Houseboats, timeshares, transient Hotel/motel conversions, using hotel or motel listings Designated Coastal Barriers Atlantic Ocean, Great Lakes, Gulf of Mexico http://portal.hud.gov/hudportal/documents/huddoc?id=11-22mlguide.pdf Appendix E 11
  12. Project is not eligible for reconsideration unless: If rejected or withdrawn within previous 12 months: New/additional information may be submitted under the HRAP option only A new approval package may be submitted to HUD for processing - must submit one if over 12 months Rejected or Withdrawn Projects Condominium Project Approval and Processing Guide 2.2 (June 30, 2011) 12
  13. Polling Question When a LENDER approves a condominium project, it falls under which approval process? 13
  14. Questions 14
  15. Project approvals expire two years from date of approval Recertification or re-approval is required if approval expires Recertification process begins 6 months prior to the expiration date and up to 6 months after expiration date Full project approval will be required if done after the six-month time frame HRAP or DELRAP is acceptable Project Recertification Documentation Requirements (HRAP and DELRAP) Condominium Project Approval and Processing Guide 2.3 (June 30, 2011) 15
  16. Project Recertification Documentation Requirements (HRAP and DELRAP) Project Certification is required for Project approvals, recertification and annexation A copy of the Project Certification can be found at ML 2012-18 Certification has specific requirements that must be met prior to signing and dating ML 2012-18 16
  17. Project Recertification Documentation Requirements (HRAP and DELRAP) Recertification cover letter Legal documents and all amendments Recorded plat map, covenants, conditions Master Deed, Signed/adopted bylaws Articles of Incorporation, Articles of Association or Condominium Trust Recorded condominium site plans ML 2012-18 17
  18. Project Recertification Documentation Requirements (HRAP and DELRAP) Management Agreement FEMA Flood Map Elevation Certificate may not be used for proposed or under construction projects Evidence of Required Insurance Coverage ML 2012-18 18
  19. Project Recertification Documentation Requirements (HRAP and DELRAP) Master Flood Insurance Policy (as applicable) Liability Insurance Hazard Insurance – Master policy Fidelity Bond Insurance Current Declaration pages for all policies Has Transfer of Control to the HOA occurred? ML 2012-18 19
  20. Adding a Phase Project must have an Approved status before a phase can be added DELRAP lenders may approve and add phases as long as it’s not within 6 months of recertification Added by HUD personnel with Update authorization for Condominium Approval Maintenance In FHAC, a phase is referred to as a submission CPAPG 5.5 20
  21. Unique Project Overview Site Condominiums Manufactured Housing Condominiums (MHCPs) Leasehold Projects Sponsor ownership Special Consideration http://portal.hud.gov/hudportal/documents/huddoc?id=11-22mlguide.pdf 21
  22. Post Project Auctions Affordable housing purchase/rental programs Deed restrictions Unit leasing restrictions Recreational leases Unique Project Overview 22
  23. Polling Questions The “Lakeside Commons” condominium project lost their HRAP approval status 14 months ago. What needs to be submitted to be reapproved? The “Rutherford Point” condo project is currently under bankruptcy protection. Is it eligible for approval for FHA-insurance? 23
  24. Questions 24
  25. Loan Level Requirements 25
  26. Case # assignment and cancellation Required Insurances Pre-sale and Owner-Occupied FHA Concentration Proposed, Under Construction, Gut-Rehabilitation, Conversion Documents Loan Level Requirements Condominium Project Approval and Processing Guide 3.1 (June 30, 2011) 26
  27. Loan Level Requirements Temporary/Conditional Certificate of Occupancy Section 203(k) Condo HECMs FHA-to-FHA transactions Site Condos Manufactured Housing Condos Condominium Project Approval and Processing Guide 3.1 (June 30, 2011) 27
  28. Polling Question The “Delray Crossings” condo complex has 57% of the units currently financed with FHA loans. How do you obtain a new case number for your borrower? 28
  29. Questions 29
  30. Project Submission Logging 30
  31. Project Submission Logging FHAC records, lists and tracks all Condo Project data which includes: Project identification number Location and Description of Project Type of construction Approval/Withdrawn/Denied How project was processed Required recertification date http://portal.hud.gov/hudportal/documents/huddoc?id=11-22mlguide.pdf 31
  32. References Condominium Project Approval and Processing Guide 5.1 (June 30, 2011) http://portal.hud.gov/hudportal/documents/huddoc?id=11-22mlguide.pdf Mortgagee Letter 2012-18 http://portal.hud.gov/hudportal/documents/huddoc?id=12-18ml.pdf Mortgagee Letters for updates and changes HOC Locations http://portal.hud.gov/hudportal/documents/huddoc?id=11-22mlguide.pdf 32
  33. Determine current status of a project by searching Condominium Approval List in FHA Connection (FHAC) https://entp.hud.gov/clas/index.cfm. Condominium List from a public search site https://entp.hud.gov/idapp/html/condlook.cfm. How to Search for Approved Projects 33
  34. Questions 34
  35. Let’s Review Project Submission Logging Mortgagee Liability Project Overview Loan Level Requirements Case Numbers Required Insurances Pre-sale and Owner-occupied FHA Concentration Proposed, Under Construction, Gut-Rehabilitation, Conversion Documents 35
  36. What did we cover? What HRAP is and how it works. What DELRAP is, the approval process and how it works. The difference between HRAP and DELRAP. Project denials and recertification process. Program eligibility. Loan level requirements. How to get project information from the FHA system. Completing the CourseObjective Summary 36
  37. Reminders: Course Evaluation. Recorded version of webinar will be available on the HUD website. Webinar FAQs will be available on HUD website. FHA Knowledge Database: http://portal.hud.gov/hudportal/HUD?src=/FHAFAQ. CALLFHA (800) CALLFHA – (800) 225-5342 or email us at answers@hud.gov. Next Steps & Resources 37
  38. We look forward to your participation in other training events. Thanks for attending this course! Overview of HUD/FHA Programs Home Mortgage Insurance for Disaster Victims 203(h) FHA 203(k) Rehabilitation Mortgage Insurance Program FHA Energy Efficient Mortgage (EEM) FHA Home Equity Conversion Mortgage (HECM) How to Manually Underwrite an FHA Mortgage Credit Underwriting - Borrower Analysis Credit Underwriting - Loan Calculations Fundamentals of DE Credit Review & TOTAL Scorecard DE Lender & DE Underwriter Roles & Responsibilities Fundamentals of Insurance Endorsement FHA Appraisal Requirements - Property Types How to Review an FHA Appraisal 38

  39. FHA Condominium Approval ProcessThank You!

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