If you are looking into buying a condominium, or already have one, and want to use it to be able to get a reverse mortgage on it later, you need to be aware of the new rules from HUD. These rules, which are explained in the Mortgagee Letter 2009-19, apply to everything that occurs after October 1, 2009. It may also apply if you have recentlIf you are looking into buying a condominium, or already have one, and want to use it to be able to get a reverse mortgage on it later, you need to be aware of the new rules from HUD. These rules, which are explained in the Mortgagee Letter 2009-19, apply to everything that occurs after October 1, 2009. It may also apply if you have recently tried to get approval for a reverse mortgage, too.
Previous Pre-approvals for Reverse Mortgages Are Canceled
If you currently own a condominium and had applied recently for the reverse mortgage program, then you will need to apply again. Literally, everything that had been pre-approved by the FHA prior to September 2009, under what was called the "FHA Spot Condo Affidavit," has now been erased.
New Approvals Are Only Temporary
When a condominium project owner applies for approval now, the approval only lasts for two years. That means that there will need to be a new approval given. HUD wants to ensure that the property and mortgage insurance is maintained, which is required under a reverse mortgage loan.
Two Ways for a Property to Be Approved
In place of the Spot Condo Affidavit, two processes have been established for approval.
1. The HUD Review and Approval Process (HRAP)
This will be the regular process for getting a condominium project approved.
2. The Direct Endorsement Lender Review and Approval Process (DELRAP)
This is for lenders that are already approved by HUD to make this kind of approval.
There are two exceptions that will not fall under this need for a two year approval. The first one is a new condominium project - which will be given a 10-year approval. The second one is a condominium that is in the process of being built and it is too late for HUD to require any changes in the plans.
Condominium Rules for Reverse Mortgage Approval Are Specific
Getting approval on a condominium can be rather tricky, and the owner will need to determine whether or not their condo is even qualified before they apply. The letter provides details as to what kind of condos are qualified - and which ones are not.
The document declares that certain types of condos are not qualified for a reverse mortgage. This includes houseboats, condominium projects or spaces that have more than 25% of it used for commercial purposes, multi-dwelling units, and buildings known as condominium hotels.
Condos That Can Qualify for a Reverse Mortgage
The rules in the letter are specific about what types of condominium structures qualify for a reverse mortgage. One type is called the site condominium. This is a single family detached dwelling that is under a condo agreement. It does not need the approval by the Condominium Project, but it will need to have Attachment D added to the Condominium Rider.
Another condominium form that is approved is the manufactured housing condominium projects (MHCP's). These are not affected by the new rules and neither can they be considered to be site condominiums. They will have to receive approval under HRAP.
There are also many rules given in the letter that may prevent many condos from being accepted and qualified for a reverse mortage. In a new condo project, the rules stipulate that at least 50% of the project be owned and occupied before it can be approved. One rule concerning investors includes one that states that there cannot be a single investor that owns more than 10% of the condo project. A condo owner cannot own more than one condo unit in the condo project is another rule.
As you can see from the issues discussed here about getting a reverse mortgage on a condominium, you will certainly need to learn much more about it before you buy your condo. You can start by learning more by downloading the actual Mortagee Letter 2009-19.y tried to get approval for a reverse mortgage, too.
Previous Pre-approvals for Reverse Mortgages Are Canceled
If you currently own a condominium and had applied recently for the reverse mortgage program, then you will need to apply again. Literally, everything that had been pre-approved by the FHA prior to September 2009, under what was called the "FHA Spot Condo Affidavit," has now been erased.
New Approvals Are Only Temporary
When a condominium project owner applies for approval now, the approval only lasts for two years. That means that there will need to be a new approval given. HUD wants to ensure that the property and mortgage insurance is maintained, which is required under a reverse mortgage loan.
Two Ways for a Property to Be Approved
In place of the Spot Condo Affidavit, two processes have been established for approval.
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1. The HUD Review and Approval Process (HRAP)
This will be the regular process for getting a condominium project approved.
2. The Direct Endorsement Lender Review and Approval Process (DELRAP)
This is for lenders that are already approved by HUD to make this kind of approval.
There are two exceptions that will not fall under this need for a two year approval. The first one is a new condominium project - which will be given a 10-year approval. The second one is a condominium that is in the process of being built and it is too late for HUD to require any changes in the plans.
Condominium Rules for Reverse Mortgage Approval Are Specific
Getting approval on a condominium can be rather tricky, and the owner will need to determine whether or not their condo is even qualified before they apply. The letter provides details as to what kind of condos are qualified - and which ones are not.
The document declares that certain types of condos are not qualified for a reverse mortgage. This includes houseboats, condominium projects or spaces that have more than 25% of it used for commercial purposes, multi-dwelling units, and buildings known as condominium hotels.
Condos That Can Qualify for a Reverse Mortgage
The rules in the letter are specific about what types of condominium structures qualify for a reverse mortgage. One type is called the site condominium. This is a single family detached dwelling that is under a condo agreement. It does not need the approval by the Condominium Project, but it will need to have Attachment D added to the Condominium Rider.
Another condominium form that is approved is the manufactured housing condominium projects (MHCP's). These are not affected by the new rules and neither can they be considered to be site condominiums. They will have to receive approval under HRAP.
There are also many rules given in the letter that may prevent many condos from being accepted and qualified for a reverse mortage. In a new condo project, the rules stipulate that at least 50% of the project be owned and occupied before it can be approved. One rule concerning investors includes one that states that there cannot be a single investor that owns more than 10% of the condo project. A condo owner cannot own more than one condo unit in the condo project is another rule.
As you can see from the issues discussed here about getting a reverse mortgage on a condominium, you will certainly need to learn much more about it before you buy your condo. You can start by learning more by downloading the actual Mortagee Letter 2009-19.
Previous Pre-approvals for Reverse Mortgages Are Canceled
If you currently own a condominium and had applied recently for the reverse mortgage program, then you will need to apply again. Literally, everything that had been pre-approved by the FHA prior to September 2009, under what was called the "FHA Spot Condo Affidavit," has now been erased.
New Approvals Are Only Temporary
When a condominium project owner applies for approval now, the approval only lasts for two years. That means that there will need to be a new approval given. HUD wants to ensure that the property and mortgage insurance is maintained, which is required under a reverse mortgage loan.
Two Ways for a Property to Be Approved
In place of the Spot Condo Affidavit, two processes have been established for approval.
1. The HUD Review and Approval Process (HRAP)
This will be the regular process for getting a condominium project approved.
2. The Direct Endorsement Lender Review and Approval Process (DELRAP)
This is for lenders that are already approved by HUD to make this kind of approval.
There are two exceptions that will not fall under this need for a two year approval. The first one is a new condominium project - which will be given a 10-year approval. The second one is a condominium that is in the process of being built and it is too late for HUD to require any changes in the plans.
Condominium Rules for Reverse Mortgage Approval Are Specific
Getting approval on a condominium can be rather tricky, and the owner will need to determine whether or not their condo is even qualified before they apply. The letter provides details as to what kind of condos are qualified - and which ones are not.
The document declares that certain types of condos are not qualified for a reverse mortgage. This includes houseboats, condominium projects or spaces that have more than 25% of it used for commercial purposes, multi-dwelling units, and buildings known as condominium hotels.
Condos That Can Qualify for a Reverse Mortgage
The rules in the letter are specific about what types of condominium structures qualify for a reverse mortgage. One type is called the site condominium. This is a single family detached dwelling that is under a condo agreement. It does not need the approval by the Condominium Project, but it will need to have Attachment D added to the Condominium Rider.
Another condominium form that is approved is the manufactured housing condominium projects (MHCP's). These are not affected by the new rules and neither can they be considered to be site condominiums. They will have to receive approval under HRAP.
There are also many rules given in the letter that may prevent many condos from being accepted and qualified for a reverse mortage. In a new condo project, the rules stipulate that at least 50% of the project be owned and occupied before it can be approved. One rule concerning investors includes one that states that there cannot be a single investor that owns more than 10% of the condo project. A condo owner cannot own more than one condo unit in the condo project is another rule.
As you can see from the issues discussed here about getting a reverse mortgage on a condominium, you will certainly need to learn much more about it before you buy your condo. You can start by learning more by downloading the actual Mortagee Letter 2009-19.y tried to get approval for a reverse mortgage, too.
Previous Pre-approvals for Reverse Mortgages Are Canceled
If you currently own a condominium and had applied recently for the reverse mortgage program, then you will need to apply again. Literally, everything that had been pre-approved by the FHA prior to September 2009, under what was called the "FHA Spot Condo Affidavit," has now been erased.
New Approvals Are Only Temporary
When a condominium project owner applies for approval now, the approval only lasts for two years. That means that there will need to be a new approval given. HUD wants to ensure that the property and mortgage insurance is maintained, which is required under a reverse mortgage loan.
Two Ways for a Property to Be Approved
In place of the Spot Condo Affidavit, two processes have been established for approval.
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1. The HUD Review and Approval Process (HRAP)
This will be the regular process for getting a condominium project approved.
2. The Direct Endorsement Lender Review and Approval Process (DELRAP)
This is for lenders that are already approved by HUD to make this kind of approval.
There are two exceptions that will not fall under this need for a two year approval. The first one is a new condominium project - which will be given a 10-year approval. The second one is a condominium that is in the process of being built and it is too late for HUD to require any changes in the plans.
Condominium Rules for Reverse Mortgage Approval Are Specific
Getting approval on a condominium can be rather tricky, and the owner will need to determine whether or not their condo is even qualified before they apply. The letter provides details as to what kind of condos are qualified - and which ones are not.
The document declares that certain types of condos are not qualified for a reverse mortgage. This includes houseboats, condominium projects or spaces that have more than 25% of it used for commercial purposes, multi-dwelling units, and buildings known as condominium hotels.
Condos That Can Qualify for a Reverse Mortgage
The rules in the letter are specific about what types of condominium structures qualify for a reverse mortgage. One type is called the site condominium. This is a single family detached dwelling that is under a condo agreement. It does not need the approval by the Condominium Project, but it will need to have Attachment D added to the Condominium Rider.
Another condominium form that is approved is the manufactured housing condominium projects (MHCP's). These are not affected by the new rules and neither can they be considered to be site condominiums. They will have to receive approval under HRAP.
There are also many rules given in the letter that may prevent many condos from being accepted and qualified for a reverse mortage. In a new condo project, the rules stipulate that at least 50% of the project be owned and occupied before it can be approved. One rule concerning investors includes one that states that there cannot be a single investor that owns more than 10% of the condo project. A condo owner cannot own more than one condo unit in the condo project is another rule.
As you can see from the issues discussed here about getting a reverse mortgage on a condominium, you will certainly need to learn much more about it before you buy your condo. You can start by learning more by downloading the actual Mortagee Letter 2009-19.
