HUD released new condo certification policies effective September 13, 2012. These revised regulations benefit associations by loosening some of the more stringent requirements for condo certifications under FHA.
Notable changes include:
1) FHA will now consider projects with up to 50% commercial space on a case-by-case basis and with substantial documentation.
2) Investor/entity owned units changed from a maximum of 10% to 50%, as long as 50% of the units have been conveyed, or are under bona fide contract to be conveyed to owner-occupants
3) Delinquent Assessments- No more than 15% of total units can be in arrears more than 60 days. The former regulation looked at the total delinquencies at 30 days.
4) Fidelity Bond changes for management companies- now either the association can name the management company as an agent or insured on its bond, the management company can have its own policy or the association’s policy can have a covered employee endorsement to cover management company personnel.
5) Slight changes were made to the Project Certification document requirements.
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