Condominium FHA Mortgage Selling

FHA Worries in New Jersey

G.C. from New Jersey writes:

Dear Mister Condo,

I live in NJ and own a condo. I need help. The condo association attorney has been giving me the run around on the FHA recertification. It’s been almost a year now since he states he did the paper work and he has been paid for the job already. No one on the board seems to care since they aren’t trying to refinance or sell their units. PLEASE HELP. I own a moderate income unit so FHA is needed.

Mister Condo replies:

Greetings to you, our Garden State neighbor, G.C.. FHA issues abound in condominiums all over the country right now. Sadly, yours is not the only tale of trouble with certification and recertification efforts on the part of condominium associations. We have similar problems here in Connecticut. The recertification process changes regularly as lawmakers and the FHA try to construct reasonable guidelines for condominiums. Unfortunately, that leaves condo owners like you and me in a bit of a bind.

I am a bit concerned that your Board is not taking more assertive action to bring the association into compliance and/or apply pressure to the paid professional to help the association achieve recertification. It is highly unusual for an individual resident to contact the condo association attorney. The attorney represents the association and not the individual unit owners. The correct chain of communication is for you to the Board and the Board to the attorney. You really need to get the Board to take your issue seriously.

You mention that you own a moderate income unit. I assume that your entire condo complex is comprised of moderate income units and that you are not alone in your FHA plight. I suggest you contact the Board via written correspondence that you need this FHA issue addressed ASAP and that you would like to see FHA recertification as a Board meeting agenda item at every Board meeting. The reality is that FHA recertification may be the only way that any mortgages or refinancing options will be available for current or future unit owners. You also need to be cognizant of the fact that FHA recertification is not a simple process. I am not sure why it has taken more than a year but there could be mitigating circumstances. You are entitled to an answer, not “the runaround” you have been getting so far.

If your Board is unwilling to do that, you really only have two other options. You can vote them out of office at your next election and replace them with unit owners that understand the importance of FHA certification or you could speak with an attorney to see if you can apply legal pressure to the Board in the form of a lawsuit. Keep in mind that bringing a lawsuit could further hamper the Board’s ability to receive FHA recertification but it may get them to work harder on your behalf. Replacing the sitting Board with elected volunteers that better represent folks seeking FHA recertification makes far better sense. Perhaps you’ll consider running for the board yourself. Good luck!

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