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CAI GreAter Los AnGeLes ChApter • www.cai-glac.orgThe LaTesT hUD how-To on Fha approvaLby Jon EberhardtOn June 30 th , 2011, HUD issued Mortgagee Letter 11-22,solidifying policy choices regarding the certification of HOAsfor HUD’s FHA-approved list. The actual mortgagee letterwas really a pointer that said; “Read the Book.” Not sinceHUD’s “Total Scorecard” has there been a more definitive“How-To” guidebook in a subject area. There are now ninetyfiveglorious pages of instructions on how to submit packagesfor HOA approval.Rather than take a look at the definitive work (which is availablefor your reading pleasure on www.hud.gov), here is a quickoutline of substantive changes that can brief you on what youwould choose to know from the small missive.Five Items you need to know about new Condo Guidelinesfrom HUD:1. Eligibility to Submit Revised. One of the first items thatstood out on Page 10 is a graphic of who is actually eligibleto submit packages to HUD. HUD now wants someonewith authority to actually submit packages. HUD requeststhat a project consultant, an HOA management companyor a board of directors submit a package for HRAP approval.Lenders can submit packages, but they require certificationfrom either the management company or the HOA itself. Keepin mind that a lender is still able to do DELRAP or DirectEndorsement Lender Review Approval Process approvals ofHOAs. However, the warranties include the certification ofthe package by the HOA or management company.2. Rental Restriction Waiver Made Permanent. As of the lastmonths of 2010, HUD attorneys pointed out that restrictingnumbers of rental units violated ownership rights and, therefore,could not be tolerated for HOAs approved by HUD. Indirect conflict with this policy was the idea that many of theserestrictions were put in place to insure owner occupancy requirementsspecifically to meet HUD’s standards. To break out ofthe conundrum, HUD issueda temporary waiver grantingHOAs certain rights regardingrental restrictions. The new mortgageeletter makes permanentthese waivers. The old waiverwas only active for a year. HOAs gainingapproval under this waiver need notnow worry that permanent changes to CC&Rs are required.3. Pre-sold Requirements. HUD had issued a temporary reductionin the percentage of pre-sold units required for initial HOAapproval to 30%. The new mortgagee letter reverts back to therequired 50% of units pre-sold before HUD approval is granted.4. State and Local Regulation Certification. HUD nowrequires confirmation by the submitting source that to theirknowledge the HOA conforms to all state and local regulations.This is an interesting item because many HOAs in Californiacannot be said to conform to such regulations. It is very easyto look up an HOA on the Secretary of State’s Business Entitywebsite – and HUD is now making such discovery part of itsapproval process. If an HOA has not filed statements of informationor taxes with the State of California they will not beafforded HUD approval.5. Appendix A – Gotcha! This document will now be requiredfor all submissions to HUD. It essentially states that you didn’tlie or mislead HUD regarding the submission of the package.Gone are fictitious delinquency factors or inflated reserve figures.HUD wants you to tell it like it is and sign your name to the factthat this is the whole truth and nothing but the truth.Jon Eberhardt is the president of Condo Approvals, LLC, whichspecializes in FHA and VA approvals. Jon can be reached atJonE@CondoApprovalsLLC.com.30 •July/August 2011
CAI-GLAC MEMBERSHIP NEWSweLCome new Cai-gLaC memBers! – as oF JULy 15, 2011CAI GreAter Los AnGeLes ChApter • www.cai-glac.orgBUSINESS PROFESSIONALSAppFolio, Inc.Garden View, Inc.RECRUITERCAI NationalCAI NationalCOMMUNITY ASSOCIATIONS707 S. Orange Grove HOA CAI NationalHarte Terrace HOA Judy Campion, CCAM ®CMCA ® , AMS ® , PCAM ®COMMUNITY MANAGERSCarrie BallesterosCAI NationalMerit Property ManagementTracie Blankenship, CMCA ® , AMS ® CAI NationalMerit Property ManagementRishi Idnani Lindsey Knoten, CMCA ®The Ritz-Carlton at L.A. LiveCOMMUNITY MANAGERS, CONT.Gregg LandisBel Air Glen HOAAmanda McClellandABM Property ManagementKathleen McGrathBowker & Roth Property ServicesJulie NicholsonEmpire West HOADanny PadillaCardinal Management GroupSharon Topping, CCAM ®Merit Property ManagementMANAGEMENT COMPANIESCT Prop Management, Inc.RECRUITERCAI NationalAlba MonroyCAI NationalCAI NationalAdrian OesterreichTeresa AgnewBevin Berube, Esq.oUr Thanks To renewing Cai-gLaC memBers! – as oF JUne 30, 2011BUSINESS PROFESSIONALSAdams Kessler PLCAnderson Group InternationalAmtech Elevator ServicesBethco Builders, Inc.Bilt-Well Roofing & SolarBoyd & AssociatesBusiness Support SpecialistsCity National Security ServicesData Systems ServicesDavid Lazarus, CPAG4S Secure Solutions USAGibbs, Giden, Locher, Turner & Senet, LLPJames Hardie Building ProductsJeffrey Hall Financial & Insurance ServicesKevin Davis Insurance ServicesPacific Western BankPrecision Environmental, Inc.Richardson & Harman, PCSattar Insurance Services, LLCCOMMUNITY ASSOCIATIONS4277 Coldwater Canyon HOABentley Manor HOACroydon Park HOAHarbor Ridge Towne Homes Assn.Harbor Terrace HOALe Parc HOAMarineland Community AssociationPark Crest HOAPlaya Pacific HOASouth Bay Estates HOASummerwind HOAThe Colony at Westwood HOAVilla Romano HOAWellworth Townhomes HOACOMMUNITY MANAGEMENT COMPANIESAberdeen Management Company, Inc., AAMCBeven & BrockHarris PropertiesCoastManagement.netJenkins Properties Management, Inc.Management Professionals, Inc.McCabe Property Management, Inc.COMMUNITY MANAGERSPamela AzarPAZAR CorporationOmar BayterVillage Northridge HOADoug Byrd, CMCA ® , AMS ®Century Hill AssociationMarek Cabrera620 South Gramercy Place HOABarbara Carter, CCAM ®Sierra Towers HOAAlana EllisCardinal Management GroupDirk Foster, CCAM ® , CMCA ® , AMS ® , PCAM ®Two Eleven Spalding Condo Assn.Carolyn Garton, CCAM ®Baldwin Real Estate ManagementDebra Hannaman, CMCA ®Ross Morgan & Company, Inc.Lesley Millender-Irwin, CMCA ® , AMS ®Manhattan Village HOA.Pete Ong, Jr., CCAM ® , CMCA ® , AMS ® , PCAM ®Campion and CompanyCOMMUNITY MANAGERS, CONT.Joanne Peña, CCAM ® , CMCA ® , AMS ® , PCAM ®Horizon Management CompanyRichard Perry, CMCA ®CoastManagement.netIlena PimentalHorizon Management CompanyAlexandria Pollock, CCAM ® , CMCA ® , AMS ®Sky Community AssociationAlex Roman, AMS ®Encino Oaks HOARobert Sides, CCAM ® , AMS ® , PCAM ®Regatta Seaside HOAGerry Suenram, CMCA ®EVO HOAEd VanVanco PropertiesVida VesceraRoyce Property ManagementIda Worth, CMCA ® , AMS ®Ross Morgan & Company, Inc.COMMUNITY ASSOCIATION VOLUNTEERSVirginia KempJohn R. NicholsonRichard ReeceBarbara WalkerJuly/August 2011 • 31
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