The Federal Housing Administration published Mortgagee Letter 2019-17 on September 27, which outlines the updated origination requirements for Home Equity Conversion Mortgages in condominium projects in accordance with the recently published SF Handbook guidance. It also includes certain borrower eligibility requirements for seniors seeking to obtain a HECM for a condominium unit using FHA’s Single-Unit Approval process.
On August 14, 2019, the Federal Housing Administration published its “Project Approval for Single Family Condominiums” (Docket No. FR-5715-F-02), Final Rule in the Federal Register, as well as updated its Single Family Housing Policy Handbook 4000.1 (SF Handbook) to include the new condominium-related policy guidance.
As FHA had announced with the August 14th publication, the final rule is applicable to both the HECM and forward mortgage programs.
The Condominium Project Approval requirements can be found in Section II.C. of the SF Handbook. The condominium requirements for units in approved projects, site condominiums, and Single-Unit Approval requirements are in Section II.A.8.p, except as noted in the ML. HECM mortgagees must comply with the guidelines beginning October 15, 2019. Mortgagees also must comply with all other existing HECM eligibility and program requirements.