According to a news release from the Department of Housing and Urban Development (HUD) several days ago, there are over 150,000 condominium projects in the United States, but “only 6.5 percent are approved to participate in FHA’s mortgage insurance programs.” In an effort to make Federal Housing Administration (FHA) loans accessible to more prospective purchasers of condominium units and because HUD estimates that 84% of FHA-insured condominium unit buyers are first time homeowners, HUD has announced some pretty significant changes to FHA regulations.  These major changes will become effective on October 15, 2019 and include:



Since 2011, FHA has required all condominium projects to be recertified every two (2) years even if the project received FHA certification prior to 2011. Condominium projects that require full certification (have never been certified or allowed their certification to expire) will continue to expire in two (2) years.  FHA has increased the recertification time period for approved projects to three (3) years.  Condominiums that are currently certified will still expire two (2) years from the current date of certification but recertification applications submitted to FHA after October 15, 2019 will not expire until three (3) years from the date the application is approved.  FHA will continue to accept recertification applications six (6) months before a project certification is scheduled to expire and six (6) months after the certification expiration date.  If you miss that six (6) month deadline, the project will not be eligible for recertification and full certification will be required.


          FHA currently requires that all condominium associations provide a reserve study performed within two (2) years which shows that the association is collecting adequate replacement reserves if the association is not allocating a minimum of ten percent (10%) to replacement reserves.  Along with increasing the recertification time period to three (3) years, FHA will now accept reserve studies performed within the last three (3) years.  FHA continues to require that reserve studies be prepared by “an independent third party” with “knowledge and experience in completing reserve studies.”  FHA will also continue to waive the requirement for a reserve study if the association is allocating at least ten percent (10%) of its total budget to replacement reserves.  This percentage is arbitrary since most condominium associations should have annual reserve contributions that exceed 10%.  Also, while Virginia statutes do not require that reserve studies be prepared by a reserve specialist, if a reserve study is needed in order for an association to obtain FHA certification, a higher standard is imposed.


          We will be providing further information in the near future concerning other new FHA regulations that will become effective on October 15, 2019 concerning: (1) a reduction in owner occupancy requirements for certain eligible projects; (2) non-residential space in mixed-use condominiums; (3) FHA loans for individual units; and (4) multi-unit owner concentration limits.

Please contact us if you have any questions about this information or any other association issues.

The Community Associations Law Team

Michael A. Inman (Email:
Jeanne S. Lauer (Email:
Gregory J. Montero (Email:
Robert V. Timms (Email:

(757) 486-7055

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