weather icon Clear

FHA approval provides many advantanges

Q: I am hoping you can help us. One of my neighbors asked if I could help him out in regard to getting Federal Housing Administration approval for our community. He is trying to get a reverse mortgage, and when he approached our board about it, he was told no, for the following reasons:

The management company said we cannot do this.

Mortgage experts tell us that having access to FHA mortgages in a community like ours is really not an advantage because virtually everyone does a conventional loan.

The cost seems high.

My first concerns are:

When I asked the management company about getting FHA approval, the CEO informed me that this is “not something that the board does. It is an individual owner’s responsibility. We do not handle any thing as this in our office.”

I question the mortgage “experts” since if you are not a veteran, the only mortgage you can get is a conventional one.

I feel like I have to call BS on the management company. I think it is their responsibility to do what the board requests of them. Am I correct on this?

When our community was built in 1997, we did have Veterans Affairs and FHA approval. I know VA approval last forever, but the FHA was never renewed.

Any insight you can provide will be much appreciated!

A: To obtain FHA approval does require some paperwork. The board would have to place this issue on an agenda and approve it, instructing the management company to pursue the action item.

An individual homeowner cannot obtain a FHA loan unless her association has met the FHA requirements.

Here are some of the FHA requirements for an association:

■ No more than 50 percent of the property can be used as commercial space.

■ No more than 15 percent of the units can be in the arrears in their assessments for more than 60 days.

■ No individual investor or entity may own up to 50 percent of the total units if at least 50 percent of the total units are owner-occupied as principal residences.

■ No more than 50 percent of the units can be investor/owner rentals.

■ At least 10 percent of the budgeted income must go toward a reserve account.

■ Adequate reserves are required to fund capital repairs and replacements for the next two years as determined by a recent reserve study.

■ If you live in a condominium, the master or blanket insurance policy must be 100 percent of the replacement cost.

■ The association must have general liability of the common elements and public ways, fidelity bond (must be three months aggregate assessments of all units) and flood insurance (if within 100-year flood plain).

■ There are a number of leasing restrictions with the most important that leases must be 30 days or state no transient rentals.

Providing homeowners with the ability to obtain FHA financing and refinancing is a worthwhile service. There are many advantages, and FHA loans are very competitive as to requirements, such as loan-to-value, which helps first-time homebuyers.

There are many banks that can help this association, or the board or management company can contact the local U.S. Department of Housing and Urban Development at 702-366-2100.

Barbara Holland is a certified property manager, broker and supervisory certified association manager. Questions may be sent to holland744o@gmail.com.

Don't miss the big stories. Like us on Facebook.
Yes, HOA’s can be sued that’s why they carry insurance

Yes, associations can be sued, which is why associations carry multiple kinds of insurance. In your case, the lawsuit should be forwarded to the insurance company who provides the directors and officers insurance policy.

Bids for work must be opened at board meeting

When bids are requested, the law requires them to be sealed and opened at a board meeting at which time the amount of each bid is to be announced.

Rude neighbor frays everyone’s nerves

Sorry to hear that you have such a rude neighbor. The association’s only recourse is to fine the homeowner. Based upon the amount of the fines if they totaled over $500, the board may consider placing a lien on his property.

State Legislature should review HOA disclosure policies

The law does require disclosure, unfortunately, it does not state that the candidate can be disqualified by the association, nor does the law state the association has the right to inform the membership of information that should have been disclosed by the candidate that would deem that candidate ineligible.

Homeowner thinks planned clubhouse too expensive

Generally speaking the management company would not be involved in any manner as to the construction of the proposed clubhouse, including the “sales presentation,” unless specifically directed by the declarant board of directors.

Find out what financial resources could help your HOA

This week, we are turning over the column to the Nevada Chapter, Community Associations Institute’s Community Interests magazine staff. This column, which first appeared in the online Community Interests magazine , cai-nevada.org, looks at little-known financial resources for your homeowners association.

HOA residents need to be responsible dog owners

Q: I recently found your column in the Sunday paper and wanted to ask a question. My homeowners association states in the community rules that there are to be no pets over 25 pounds, as there is a two-dog limit rule, with having both dogs at a 45-pound limit for two pets.

HOA and county agree: take in your garbage cans

Q: I used to own a condo and always found your articles on a variety of subjects helpful and interesting. My question relates to garbage cans in non-condo developments. I have neighbors who leave them in front of their garage doors 100 percent of the time. Now, many of the other residents are doing the same thing.

HOA board has armed guards attend meeting

As to the first question, I would not say security is common per se, but there are associations that have security guards present at their association meetings.

HOA board members should take care in communications

Every day we communicate, be it our telephone conversations, our emails and our letters. As community managers and homeowners association board members, we communicate when we send governing documents, budgets and financial reports to our residents.