Kenneth R. Harney, a columnist for the Washington Post, on Friday published an illuminating column on the impact the new FHA guidelines are having on the condominium market. Mr. Harney characterized this chilling effect when he wrote: “This, in turn, has abruptly shut off loan money for would-be buyers and refinancers, forcing them to pursue conventional bank loans requiring much higher down payments – sometimes 20 percent higher compared with FHA’s 3.5% minimum – which they often cannot afford.” Continue Reading Washington Post Sheds Light on FHA Debacle

As if the Federal Housing Administration hasn’t done enough already to tank the market for condominium units in the United States, it seems they are now contemplating a prohibition on transfer fees in order for a condominium association to qualify for FHA-insured loans.  Here is a report from Community Associations Institute on the issue: 

"As part of a series of training sessions on the revised, Federal Housing Administration’s (FHA) condominium mortgage guidelines, FHA informally announced that it would be issuing new regulatory guidance to address the issue of deed-based transfer fees. FHA indicated that it would likely disqualify any condominium association with deed-based transfer fees from access to FHA-insured mortgages. This news comes as condominium associations across America are still reeling from the July 2011 FHA Guidance which imposed new and confusing underwriting guidelines that conflict with condominium business practices, state law and common sense. In response to this sudden announcement by FHA, CAI has dispatched a letter warning FHA of the dire consequences to the condominium market if it follows through on its announcement.Continue Reading CAI Cautions FHA on Transfer Fees, Calls for Waiver

Recently, I wrote an article that was published in the October 2011 edition of the CAI Rocky Mountain Chapter’s Common Interests magazine. Colorado HOAs: At a Legislative and Regulatory Crossroads focuses on the evolution of legislation in Colorado beginning with passage of Senate Bill 100 back in 2005 through the 2011 legislative session. 

In my opinion, based upon the legislative trends in Colorado and the anticipated report from the Division of Real Estate which will be published in December summarizing complaints received about HOAs, there is no question we are at a legislative and regulatory crossroads in Colorado. Lawyers like me can pontificate on what we expect to see during the 2012 legislative session. However, the fact is that not one of us has a crystal ball. Instead, we will have to wait and see what the legislative and regulatory fall out will be from the Division’s report. In addition, there’s little doubt that HOAs will be a legislative focus in what promises to be a highly charged session rife with election year politics.

 Continue Reading Anticipating the 2012 Legislative Session for HOAs

According to Community Associations Institute ("CAI"), the Federal Housing Administration is evidently backing off a new requirement that management companies carry a fidelity bond on any condominium association they manage that would cover an amount equal to the association’s budget and reserves.  Here is what CAI is reporting: 

"Thanks to pressure from CAI members across the country, the Federal Housing Administration (FHA) indicated that it will revise a controversial regulatory mandate that would require management companies to carry a fidelity bond if they managed a condominium association. In June, FHA released new guidelines for its condominium mortgage insurance program. The guidelines set standards that condominium associations must meet in order for any potential buyer to qualify for a FHA-backed mortgage. As FHA accounts for nearly one in three condominium mortgages, the guidelines have a significant impact on the marketability of condominiums.

 Continue Reading CAI Reports FHA Backing Away From Management Company Insurance Mandate

I just returned from an excellent training provided by the U.S. Department of Housing and Urban Development (“HUD”) on the new and revised requirements for FHA condominium project approval found in the Condominium Project Approval and Processing Guide.

The 800 pound guerilla in the room was the new Project Certification requirement. Beginning on August 31, 2011, any application for a new certification or recertification submitted to HUD for FHA approval requires the condominium association, or an agent of the association, to sign the Project Certification which says the following:Continue Reading HUD Commits to Revisit Provisions of the FHA Project Certification

 Here’s an update from CAI National on CAI’s lobbying efforts relating to FHA’s role in establishing criteria for condominium associations to become approved for FHA-backed loans: 

"The House Financial Services Committee’s Subcommittee on Insurance, Housing and Community Opportunity hosted a hearing on September 8, examining the role of FHA in the mortgage markets. Acting FHA …

On Wednesday, the Colorado Division of Real Estate distributed the following communication relating to HOA Registrations: 

“One of the purposes of HOA registration is to provide the Colorado consumers with basic information about HOA’s, including their physical address and contact information for the HOA. It is important to remember that when you register your HOA…

Back in May, Lindsay Smith blogged on a story involving a couple in Louisiana who were displaying a banner in their yard supporting their son who is a Marine serving in Afghanistan. 

Timothy and Jodi Burr, the proud parents of the Marine, claim that a covenant of Gardens of Southgate Homeowners Association (“Association”) prohibits the placement of signs on lawns within public view. They also maintain that the Association is selectively enforcing this covenant since the Association has allegedly not taken enforcement action on “numerous signs throughout the neighborhood.” 

Since May, this story seems to have taken on a life of its own and has become extremely ugly. Evidently, the couple did not take down their banner and the Association has filed a lawsuit against them to force compliance. In addition to the issue of selective enforcement, the couple has contended that the Association has been unresponsive to their requests for a meeting to discuss this issue. Continue Reading Do HOAs Need to Rethink Prohibitions on Displays Supporting Members of the Military?