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Policy guidance clarifies condo approval/recertification process

WASHINGTON, DC – July 1, 2011 – (RealEstateRama) — The Federal Housing Administration (FHA) today published updated condominium policy guidelines and instructions that clarify the approval and recertification process and policies for condo projects. FHA’s mortgagee letter includes a Condominium Policy Guide and Implementation Schedule identifying timelines for lenders to comply with the guidelines.

“Today, we institute revised guidelines that preserve FHA’s role in the condo marketplace during these difficult times while making certain we manage risk in a responsible way,” said FHA’s Acting Commissioner Robert Ryan. “This guidance formalizes and expands the policies we put in place in 2009 and lays the groundwork for a more formal rulemaking process going forward.”

FHA’s mortgage letter and guide will:

  • Consolidate guidelines published in 2009;
  • Provide a single source of information for the Condominium Approval and Recertification Process;
  • Update, consolidate and clarify existing condominium policy guidance; and
  • Expand FHA’s flexibility to consider exceptions at the individual project level

Condominium project approval can be issued by FHA staff or by lenders who have delegated approval authority. In addition, FHA’s Homeownership Centers will have greater flexibility to make determinations to address individual circumstances on a one-on-one basis.

The Housing and Economic Recovery Act of 2008 (HERA) transferred FHA’s condominium mortgage insurance authority from Section 234 of the National Housing Act to Section 203, thereby requiring the issuance of updated administrative guidance as well as new underlying regulations. The Mortgagee Letter (ML) and Guide published today define the requirements for obtaining, recertifying and maintaining condominium project approval. Later this year, the U.S. Department of Housing and Urban Development (HUD) will publish proposed rules on FHA’s condominium program and seek formal comment from interested parties.

Read FHA’s mortgagee letter and revised policy guidance.


HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at and You can also follow HUD on twitter @HUDnews or on facebook at

Lemar Wooley
(202) 402-7527