Getting a FHA Reverse Mortgage on a condominium requires a little more paperwork, but is a great option for many seniors. FHA has special guidelines for condominiums to help judge the stability of the condominium complex. In a few cases we have actually worked with borrowers and their condominium associations to have the condo rules changed in order to meet FHA Guidelines.
As an FHA Direct Endorsement Lender, we can actually issue "Spot Approval" on condominiums that are not already FHA Approved. This saves a lot of time since we issue these approvals without having to send the condo documents to FHA. There are still guidelines that the condominium has to meet in order for us to issue a spot approval:
- 90% of the Units must have been Sold
- 51% of the Units must be Owner Occupied (Not Rentals)
- No single entity may own more than 10% of the units
- No more than 10% of the units can have FHA Financing (20% if less than 30 units)
- Control of the common areas must have been turned over to the association for 1 year
- No ongoing or further addition of units, common elements or facilities anticipated
- There can be no restriction on conveyance (i.e. first right of refusal at sale)
If you live in a condominium and are considering a reverse mortgage, call one of our reverse mortgage specialist today. They can check to see if your condominium association is approved and walk you through the approval and reverse mortgage process.