Starting the FHA Approval Process:
Starting the FHA Approval process is not difficult, but it does differ depending on your role in the community.
Property Managers/Board Members:
The first step is to have the community pre-qualified. A professional submission service will be able to assess the eligibility of your community prior to submitting. You will need to fill out a questionnaire and submit a few documents, but they should be able to assess the eligibility of the community and advise whether or not FHA Approval is an option.
Not being FHA approved can cause major headaches and cause a lot of stress for your homeowners. Nationwide, FHA insured loans make up anywhere from 40 – 70 percent of the market. It is highly advised to either get your community FHA Approved, or at a minimum, get the eligibility reviewed.
The best way to start the process is to contact the Property Manager or Board of Directors and ask if they are aware of the FHA Status. Sometimes they are aware of issues that may preclude the community from becoming FHA Approved.
How to get started:
Contact the Property Manager or Board of Directors
Let the Manager/Board know that FHA Approval would help your situation.
Each Management Company and Board has different procedures. Ask the best way to proceed.
Be aware that this process can take quite a bit of time (30-60 days). If you plan on selling your unit, refinancing, or obtaining a reverse mortgage – start the process immediately!
Contact the management company. If you are not a member of the community or representing a current owner, it can be more difficult to gather the required documents. Be prepared to pay management company document fees; there are many documents that you will need to get a condo FHA certified, and it is customary for a management company to charge a fee.
Working through the process:
There are two ways to approach the submission process. The community can either submit the paperwork themselves, or hire a professional submission service. Submitting on your own does have potential liability issues and can result in a considerable amount of additional time.
If you have contracted with a professional consultant they will send you a list of documents that are needed. Once the documents are reviewed there is a good chance some additional information will be required and some documents or policies might need to be signed or changed to meet FHA standards.
Dealing with rejection:
Being rejected is common. Most often, the FHA wants to see some additional information or has some questions. The submission service you have contracted with should help you work through a rejection. A rejection may be as simple as a missing signature; more challenging issues include revising governing documents or increasing insurance coverage to comply with FHA guidelines.