Many condominium communities in Detroit have a homeowners association. HOAs are an important component of these communities and take on many tasks in the operation of these communities. One task many choose to undertake is becoming approved for Federal Housing Administration insured mortgages. Condos must be approved by the FHA for lenders to issue FHA-insured mortgages for them. However, is it worthwhile for HOAs to seek such approval?
Not all HOAs seek FHA community approval
There are a variety of reasons why an HOA may choose not to seek FHA community approval. The FHA has strict guidelines regarding unit ownership and ratios that the HOA may decide they do not want to adhere to. The FHA also requires HOAs to oversee certain aspects of the community to be certified for FHA mortgages. This may be too much for some HOAs to take on.
FHA community approval may be beneficial to some
Still, some HOAs do choose to seek FHA approval, in hopes of becoming eligible for FHA mortgage lending. One reason for doing so is to attract more buyers. It is important to note that FHA condo community approval expires after a certain amount of time, requiring recertification.
Seek help if your HOA wants to be certified for FHA lending
Ultimately, if your HOA decides to seek certification for FHA lending, it can help to first seek legal advice, which this post does not provide. Attorneys in the Detroit area may be a good source of information and guidance to HOAs in a variety of legal matters, including FHA lending approval.