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FHA Condo Confusion

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rtubbs

Junior Member
Joined
Jan 15, 2002
4150.2 specifies the following:

"Before performing the assignment, the appraiser must check with the lender to ascertain that the project is on an approved list maintained by the HOC or by a DE underwriter who has performed a spot
condominium approval. The appraiser must check the URAR item indicating that the property is within a
condominium project, and therefore, eligible for FHA endorsement."

4150.2 for the previous VC-13 specifies the following:

"If the subject property is located in a PUD or condominium setting, it must be on FHA's approval list or accepted through reciprocity."

The new VC-13 asks the following questions:

"Property is a condominium (yes or no)", if yes:
"This property is not on an FHA approved condominium list (yes or no)"
Yes responses require descriptions on page 5 of the VC form

Several questions:

1. What is a DE underwriting spot approval?
2. What does accepted through reciprocity mean?
3. If we are to check with the lender about a condo being on an approved list prior to beginning the assgnment, what's the meaning of a "yes" answer to the new VC-13(a)-that it's not on an FHA approved condo list?

As you might expect, I have an appraisal on a property (single family detached) that is in a condo project not on FHA's approved list. As you might also expect, there are several FHA sales in the project.

Final question: Is all of the above irrevelant-go ahead with the appraisal and let the lender worry about it?
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
FHA recently did away with the approved PUD list. You might want to contact your HOC and ask them about it for a condo project though. Haven't done a FHA condo in quite a while now.

Or wait for Ben V to answer this! LOL
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Last time I called the HOA about this, they no longer approved PUDs and Condos. Just useless boxes to check o.k. You can't leave them blank.

Roger
 

rtubbs

Junior Member
Joined
Jan 15, 2002
Roger, makes you wonder if they did away with condo approval why does the new VC-13 address condos? HUD did away with PUD approval and dropped that from VC-13. Clear as mud, huh?
 

Ghost Rider

Senior Member
Joined
Apr 27, 2003
Professional Status
Banking/Mortgage Industry
State
Connecticut
You can look up Condo approval status here.........HUD Approved Condos
 

Ben Vukicevich SRA

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

FHA still requires approved condo status...which makes me wonder about a reponse to the other post on the FHA forum that stated FHA now requires the condo form. That's strange because FHA goes through all this condo approval BS just so you don't have to repeat the info on the FNMA condo form...like if the condo is already FHA approved..does it get more approved by using the FNMA condo form???? Does the DEU look at all that Project and Phase info, parking space info,if the project has an FHA approval number...Nah

Anyway, prior to beginning any FHA condo appraisal, I check the FHA web-site for approved status. Be persistant there. Zip code searches are not always accurate. If you don't find your project via zip code right away, try the entire state selection, then browse by the subject's county,. They usually get that right. :rolleyes: :rolleyes:

If it's not approved, I call the lender to see what the DEU wants to do with it. He/she has the final say. If they say "no," it's a dead deal. If they say go ahead, they'll probably do a spot approval or maybe it's approved via VA reciprocity, although I don't know if VA is approving anything anymore. So at that point it moves from an appraisal problem to an underwriting problem. Just mark that it's not on FHA's approved list and let the DEU take over from there and remove your condition via spot approval.

Ben
 

rtubbs

Junior Member
Joined
Jan 15, 2002
Thank you, Ben. Searched by zip and by city and it ain't there. Will proceed as you suggested.
 
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