Condos (Are Exempt)
HUD REO’s are an exception and the development does not have to be on Approved list for buyers to use FHA financing.
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, DC 20410-8000
ASSISTANT SECRETARY FOR HOUSINGFEDERAL HOUSING COMMISSIONER
www.hud.gov espanol.hud.gov
November 6, 2009 MORTGAGEE LETTER 2009-46 B
TO: ALL APPROVED MORTGAGEES
ALL FHA ROSTER APPRAISERS
SUBJECT: Condominium Approval Processfor Single Family Housing
In accordance with the passage of the Housing and Economic Recovery Act of 2008
(HERA), the Federal Housing Administration (FHA) is implementing a new approval process for
condominium projects and insurance requirements for mortgages on individual units, as
authorized under Section 203(b) of the National Housing Act. The requirements of this
Mortgagee Letter are effective for all case numbers assigned on or after December 7, 2009,
except as noted. This Mortgagee Letter revises and consolidates existing guidance, and therefore
replaces Mortgagee Letter 2009-19.
FHA will now allow lenders to determine project eligibility, review project
documentation, and certify to compliance with Section 203(b) of the NHA and 24 CFR 203 of
FHA’s regulations. FHA will continue to maintain a list of approved condominium projects.
Lenders will be required to retain all the project legal documents, contracts, conveyances, plats,
plans, insurance coverage, presale and owner occupancy conditions and other documentation in
connection with their review and approval of the condominium project.
PROJECT APPROVAL
I. Approval Processing Options
A. Lenders will have two condominium project approval processing options. The
applicable documentation requirements will be the same for each option:
1. HUD Review and Approval Process(HRAP).
2. Direct Endorsement Lender Review and Approval Process (DELRAP), outlined
in this Mortgagee Letter. This option is only available to lenders who have
unconditional Direct Endorsement authority and staff with knowledge and
expertise in reviewing and approving condominium projects.
Under DELRAP, lenders must provide the condominium approval or denial
documents to FHA within five (5) business days of final disposition. These
documents must be uploaded using pdf format through FHA Connection.
In accordance with the passage of the Housing and Economic Recovery Act of 2008
(HERA), the Federal Housing Administration (FHA) is implementing a new approval process for
condominium projects and insurance requirements for mortgages on individual units, as
authorized under Section 203(b) of the National Housing Act. The requirements of this
Mortgagee Letter are effective for all case numbers assigned on or after December 7, 2009,
except as noted. This Mortgagee Letter revises and consolidates existing guidance, and therefore
replaces Mortgagee Letter 2009-19.
FHA will now allow lenders to determine project eligibility, review project
documentation, and certify to compliance with Section 203(b) of the NHA and 24 CFR 203 of
FHA’s regulations. FHA will continue to maintain a list of approved condominium projects.
Lenders will be required to retain all the project legal documents, contracts, conveyances, plats,
plans, insurance coverage, presale and owner occupancy conditions and other documentation in
connection with their review and approval of the condominium project.
PROJECT APPROVAL
I. Approval Processing Options
A. Lenders will have two condominium project approval processing options. The
applicable documentation requirements will be the same for each option:
1. HUD Review and Approval Process(HRAP).
2. Direct Endorsement Lender Review and Approval Process (DELRAP), outlined
in this Mortgagee Letter. This option is only available to lenders who have
unconditional Direct Endorsement authority and staff with knowledge and
expertise in reviewing and approving condominium projects.
Under DELRAP, lenders must provide the condominium approval or denial
documents to FHA within five (5) business days of final disposition. These
documents must be uploaded using pdf format through FHA Connection.
Link: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-46bml.pdf