CAI has learned that Federal Housing Administration (FHA) officials intend to release revisions to existing condominium approval guidelines before Sept. 1. The new requirements await final approval by FHA Acting Commissioner Carol Galante.
FHA staff told CAI the new guidelines are intended to provide flexibility for condominiums, but will reflect enhanced risk management standards being enforced in all FHA program areas. Based on these comments and other indications by Galante, it’s unlikely the revised guidelines will offer substantive relief from current FHA condominium program requirements.
In the absence of a condominium regulation, FHA’s administrative authority is limited with respect to the changes it can make. CAI will continue to urge that FHA and its parent agency, the U.S. Department of Housing and Urban Development (HUD), move expeditiously to provide an appropriate legal foundation for FHA’s condominium program so condominiums have the greatest opportunity to earn FHA approval. Learn more.
“CAI and its members have worked on numerous fronts to keep HUD and FHA focused on the importance of more reasonable and practical condominium-approval guidelines,” said Dawn Bauman, CAE, CAI’s senior vice president of government and public affairs. “This is a critical public policy issue for homeowners, condominium communities and the community association industry at large. We’ll keep pressing until the approval process is where it needs to be.”
In another development, Fannie Mae and Freddie Mac have announced changes to short sale policies to help more borrowers avoid foreclosure and stabilize neighborhoods. Mortgage servicing companies will begin using the new short-sale procedures in early November.
The new guidelines permit Fannie and Freddie to offer a streamlined process to qualify and approve short sales where the borrower has missed several mortgage payments. The plan also will reduce or eliminate documentation burdens for borrowers with low credit scores or who face serious financial hardship.
In an important policy change, borrowers who are current on their mortgage payments will be permitted to sell their homes in a short sale, subject to approval from their mortgage servicer.
Short sales allow homeowners to sell their homes for amounts less than the value of existing mortgages. While Fannie and Freddie incur losses in a short sale, these losses are lower than the costs of foreclosure, making the short sale a preferred foreclosure alternative for both companies.
Community associations should be aware that these sweeping changes to short sale requirements have established a maximum aggregate payment of $6,000 per short sale to satisfy any subordinate lien on the property. This could include any association lien for non-payment of assessments or other amounts due. Learn more.
CAI will continue to communicate with Fannie and Freddie about the impact of their policies on community associations.
With more than 32,000 members dedicated to building better communities, CAI works in partnership with 59 domestic chapters, a chapter in South Africa and housing leaders in a number of other countries, including Australia, Canada, the United Arab Emirates and the United Kingdom. CAI provides information, education and resources to community associations and the professionals who support them. CAI’s mission is to inspire professionalism, effective leadership and responsible citizenship—ideals reflected in communities that are preferred places to call home. Visit www.caionline.org or call (888) 224-4321.
For members and general inquiries, contact the
CAI Member Service Center:Phone: 703-970-9220
MEDIA CONTACT: Amy RepkePhone: 703-970-9239