Completing a reverse mortgage on a condo is a little bit more tricky then a single family residence. The entire condo project must get approved by the FHA before you may proceed with a reverse mortage. Some lenders will complete this assignment for you, but HOA’s tend to be the lion to fight on this. Many HOA’s are not willing to help in this process. If you are serious about proceeding with a reverse mortgage on your condo, but don’t not sure where to start?
- Contact your loan specialist to have him/her look to see if project is approved. If the project is approved and active then you may proceed with the reverse mortgage
- If you project is NOT approved then the fun begins. You will need to ask your lender and see if they handle getting condo projects approved. If they are not willing to help you with this procedure it’s a good indication to find another loan specialist that will.
- Once you have found a loan specialist that will help you through the process, then contact your HOA and explain the situation and forward the contact information to your loan specialist.
- Your loan specialist will then be in direct contact with your HOA and will only come to you if he needs you to lay the hammer down because the HOA is not cooperating.
- There may be out of pocket fees. Some HOA’s charge to provide the documentation to get the condo project approved.
Rules apply to seniors on a condo the same as a single family residence. The condo must be your primary residence and you must be at least 62 years of age. There are two ways of getting your condo project approved by FHA:
- HUD Review and Approval Process (HRAP) - This is now the standard process to receive approval for condominium projects.
- Direct Endorsement Lender Review and Approval Process (DELRAP) - This form of approval is only given to those lenders who are already approved by HUD to give approval for condominium projects.
FHA is very sensitive on approving condo projects and many little things can disapprove a condo project off the bat. This is not for you to worry about though. Please have the loan specialist you trust ask your HOA all the necessary questions. This process typically takes around two months to go through, so please be patient.