Lender Ordered a FHA Appraisal for Condo, But Complex is not on the HUD Approved List

[Anitaihale]

A Lender ordered a FHA Appraisal for Condo, But Condo Complex/Building is not on the HUD Approved List. The lender mentioned something about spot FHA approved. If the building is not HUD approved, can the condo individually meet the FHA requirements? The condo itself is in good condition.

 

[Greg Bell]

No.............

 

[tjcou812]

The lender should have known this before ordering the appraisal its very easy to check if its on HUDS condo approved list. If the condo complex is not on the list the lender can request by filling out an application that it be added and if the complex meets HUDS standards they will add it to the list.

 

[ghrousseau]

A Lender ordered a FHA Appraisal for Condo, But Condo Complex/Building is not on the HUD Approved List. The lender mentioned something about spot FHA approved. If the building is not HUD approved, can the condo individually meet the FHA requirements? The condo itself is in good condition.

Anita,

The lender will do a spot approval. There is a whole laundry list of items they need to include in their file that gets sent to the investor and HUD. The DE underwriter is responsible for these items. You can search the HUD Website for the Spot Approval Guidelines. You appraisal is completed as you normally would, but pay special attention to the condo information on the report. The lender will likely have the Condo Certification from the management company so you could ask for a copy. If there are any special appraisal requirements they would be listed with the Spot Condo Approval Guidelines which can be found on the HUD website.

 

[timd354]

A Lender ordered a FHA Appraisal for Condo, But Condo Complex/Building is not on the HUD Approved List. The lender mentioned something about spot FHA approved. If the building is not HUD approved, can the condo individually meet the FHA requirements? The condo itself is in good condition.

Yes, the lender can do a FHA spot approval of the condominium unit that you are appraising if it qualifies. This a very common in the areas in which I appraise. Just complete the appraisal report and send it into the lender, it is the job of the DE underwriter to do the spot approval. The spot approval process is not anything that the appraiser has to address.

 

[Carnivore]

Anitaihale

Make absolutely sure you have the numbers correct on:

Tenants
individual People/Entities who own more then 10% of the total units.

Seriously, this is huge.

 

[ghrousseau]

Anitaihale

Make absolutely sure you have the numbers correct on:

Tenants
individual People/Entities who own more then 10% of the total units.

Seriously, this is huge.

Yes. 51% owner occupied is a requirement. Any less than 51% owner occupied is a deal killer with HUD. Also what Carnivore pointed out.

 

[Riick]

Re: What Carnivore & ghrousseau said:
There was a longish thread here about ownership; the gist from your perspective
is that the LENDER will get these figures direct from the condominium,
so to be safest, you want those figures sent to you from the U/W (or DEU ??)
for inclusion in your report.

 

[444nutman]

Anitaihale

Make absolutely sure you have the numbers correct on:

Tenants
individual People/Entities who own more then 10% of the total units.

Seriously, this is huge.

That is what is killing the condo conversion market in my area. Not so much the 10% but the high rental rate. Nobody will loan in a project with 51% or higher non owner occupied. Cash sales rule in these projects and the are selling sometimes up to 80% less than 2 years ago. Conventional lenders are backing away from these projects as well.

 

[timd354]

Re: What Carnivore & ghrousseau said:
There was a longish thread here about ownership; the gist from your perspective
is that the LENDER will get these figures direct from the condominium,
so to be safest, you want those figures sent to you from the U/W (or DEU ??)
for inclusion in your report.

I always get these figures or have the lender get these figures from the condominium ***'n or manager, but I also check these figures against the public records as it is not unknown for condominium associations, especially in smaller self-managed projects, to not be truthful. I have not found this to be a problem when the project is managed by one of the larger, professional management companies, but it never hurts to check the data for any large discrepancies and note it in the appraisal report....if their is a discrepency between the public records (which sometimes can be outdated) and the data provided by the HOA, i simply provide all data from both sources in the appraisal report and let the DEU decide which data are most reliable.