In Mortgagee Letter 2011-22 dated June 30, 2011, the U.S. Department of Housing and Urban Development (“HUD”) consolidated and updated the requirements and procedures for its condominium approval process. The new requirements clarify, expand, consolidate, and update the preexisting guidelines and replaces exisitng mortgagee letters (2009-46a, 2009-46b, and 2011-03).
The new requirements will take effect 60 days after ML 2011-22 was issued for all project approval packages submitted to HUD for review.
New and existing condominiums ( meaning association board of directors as well as condominium developers) should take heed of these new guidelines. The status of a condominium as approved (or not approved) can have an impact on the ability of unit owners to sell units, as qualification for FHA conventional loans hinge upon whether the condominium is approved.
If you have questions or uncertainty about how this affects you, as a condominium unit owner, developer, or lender, we urge you to contact your legal counsel for further discussion.