Real Estate | New rule a major condo headache | Seattle Times Newspaper
FHA says the rule changes it has adopted, which focus on project budgets, insurance and financial reserves, have been prudent and are designed to avert losses from delinquencies and foreclosures. But the agency confirms that thousands of condo projects have failed to obtain or apply for required recertifications under the new rules.
Out of approximately 25,000 condo projects nationwide with expiration dates for FHA eligibility between last December and Sept. 30 of this year, only 2,100 — just 8.4 percent — have been approved or recertified by the agency, according to Lemar Wooley, an agency spokesman.
These rules force condo associations to collect assessments aggressively and fund reserves, among other things. There are many signs pointing to the same conclusion: many condo associations are in significant financial distress.