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FHA Condo Approval

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spettifer

Thread Starter
Sophomore Member
Joined
Jan 24, 2002
Professional Status
Certified General Appraiser
State
California
Hi all, I have a question for the FHA experts. One of my appraisers is completing a FHA appraisal on a condo unit. The condo unit number is not on the list of approved projects in Orange County, Ca. It appears there may be a mistake and the condo project name may have been changed. we cannot verify this. There have been five or so past FHA financed units. A call to the local HUD office was met with rudeness, stupidity, etc. The Lady said that the appraiser had to personally prove there was a mistake of some kind. She could not tell us one way or another and the fact that there were previous FHA deals in the project is of no consequence. The lender says that if there are others with FHA financing that we are idiots and the project is obviously approved. Any thoughts on this situtation would be appreciated.

Thanks,

Scott
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
I went through this a couple of times, once for a small PUD and once for a condo PUD of townhomes.

It is up to the lender to provide to you the proof of HUD approval of that project. If it is not provided to you by the lender, put an "X" in the "Yes" box on the VC-13-a. Put a corresponding explanation of that answer on page 4 of the VC stating that the lender did not provide the proof of it being approved and that you could not confirm that it is or is not. Outside of the appraisal report, send a copy of the page of the HUD Handbook regarding their obligations on this issue to the lender.

Regarding other FHA sales in the project: It's probable that the lender never checked on that and the appraiser likely never did either. It will catch up at FHA later and be something for that lender and appraiser to deal with then. Don't add your name to list of appraisers to be dealt with later.

I worked real hard on verifying this for the condo project with the lender because that lender is a very good client that want only the truth. It turned out that it was approved and all went well.

The PUD subdivision one was easily recognized as to why it was not on FHAs approved PUD list as there is a large power line along the edge of the subdivision and an industrial park the other side of the power line with a large LP gas company that has numerous large LP gas storage tanks in it's yards. Something that the other appraiser(s) did not notice. :roll:
 

larryhaskell

Senior Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Nevada
I have completed an appraisal in a condo development not approved by HUD. The LO was aware of an exception that would allow FHA appraisals provided the total number of FHA loans in the development was below a certain percentage. You might check with your LO or in the appropriate HUD document. Good luck.
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Scott,

First, don't assume that the FHA approved condo website has it all together. You may have to extend your search beyond just the zip code. I've found lots of incorrect/missing things on the FHA approved condo or PUD website using the zip code search.

The big item is aliases for the condo name and second, condos placed in the wrong zip code.

If there are other FHA' s insured in the project, it may be an indication that it's approved. You may have to extend your web search to the entire FHA field office of your area and then search by county until you find your project or its alias. Be persistent. You'll probably find it if you look hard enough.

On the other side, if you remember the old National VC sheet, there was something mentioned about a "spot approval" process for condos. Since that is a DEU thing, I don't know anything about it or if it is still in effect. That could also be the reason why there were FHA insured units in your project, "spot approvals."


Ben
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Ben:

According to what we ran into last year they are no longer doing spot approvals...

Had one that 'everyone knew' was on the approved list, and (like above described) there were other FHA closings in the complex. We couldn't find it on any list anywhere and came to the conclusion after taking a LOT of abuse for refusing to check the OK box that if it was approved some one else better provide us with the docs.

Loan didn't close. We lost a good regular paying client because we were unreasonable and stupid. :roll: :roll: . So it goes.
 

Wally Jones

Senior Member
Joined
Jan 23, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Good job on being diligent, Scott. Yes, it's the DEU's responsibility to provide you with the approval information, but they can be less than thorough or even fooled, as I recently found out. Had a job within a PUD last month that I couldn't verify was on the approved list. Finally got in touch with the underwriter and she says well, of course it's approved or else we wouldn't have had an FHA case number assigned. That's when I pointed out that the FHA case number was from a neighboring district and didn't that seem a bit curious? Don't know if that had anything to do with it, but three days later had a request from the client to complete the report as a conventional loan.

Good luck.

Wally
 
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