Due Process and FHA Recertification

M.B. from Hartford County, Connecticut writes:

Dear Mister Condo,

Our condo’s FHA certification has expired. I asked the Board President about our recertification. He stated to me that he and the Vice President decided the Board did not want to seek FHA recertification because “people that are FHA are the ones that don’t pay their condo fees on time”. I stated to him that I have a FHA mortgage and he said “you are the exception”. I actually serve on the board and never heard any mention of FHA recertification or the decision to let it lapse. How can I get this Board to reconsider FHA recertification?

Mister Condo replies:

M.B., FHA certification and recertification is a hot topic in many condo communities across the nation. With Fannie Mae and Freddie Mac out of the mortgage insurance business, most communities will choose to keep their communities FHA certified in order that current and future unit owners can more easily obtain mortgages that are offered by lenders following FHA guidelines.

The decision whether or not to pursue FHA approval is up to the association, and, therefore, business before the Board. It is no different than any other business matter the Board faces. It should be an agenda item on an upcoming meeting. It should be discussed and voted upon. The President and Vice-President will both have votes on that decision so unless you can garner some more support for FHA recertification, you may be out of luck. However, I suggest you arm yourself with the latest information on the subject. You’ll find everything you need at the CAI website- http://www.caionline.org/govt/MortgageMatters/FHA/Pages/default.aspx.

* A word of caution to you and your fellow BOD members. Be very careful how you choose your words when describing unit owners who finance with FHA certified loans. The federal government does not take kindly to any form of discrimination. Your association Board could find itself on the wrong side of a lawsuit. Financial discrimination would not be looked at kindly if a disgruntled owner found themselves at odds with the Board over a policy designed to keep someone out of your condo.