Landmark case to make FHA Condo Approval a requirement for Associations?

Landmark case to make FHA Condo Approval a requirement for Associations?

There is a case coming out of Ohio that should be of concern to condominium associations that do not seek FHA approval. The Ohio Civil Rights Commission has filed suit against a condominium association in Ohio that refused FHA approval for a buyer. The buyer complained to the Commission, and the Commission thought enough of the facts of the case to file suit against the association, alleging discrimination against an FHA purchaser by the association’s failure and refusal to seek certification.

The GreenHouse GroupFHA mortgages constitute twenty five percent of the current mortgages being issued. One has to wonder why an association would exclude a quarter of the demand market, unless it considers those within that twenty five percent to be undesirable or of lesser financial status than those purchasers in the remaining buyers market. This is the crux of the complaint.

It used to be a HUD requirement that the condominium association had to vote to approve the process of FHA approval, but HUD has since rescinded this requirement, due to the complaints of buyers and reverse mortgage applicants that associations were denying their attempts at certification to accomplish their purchase or refinance needs. Now, any interested party may proceed with an approval without the blessing of the board.

There has been no decision rendered in this case yet, but housing is a well-protected and codified area of law that is always evolving. Associations would be wise to seek counsel to ensure that their actions or in-actions do not run afoul of current or imminent court decisions regarding discriminatory practices.  

On another FHA-related topic if you’d like to see how the lower FHA loan limits in So Cal will affect you click here.   

By FHA Pros – newsletter@fhaprosllc.com

On another FHA-related topic if you’d like to see how the lower FHA loan limits in So Cal will affect you click here.   

David Hughson

858-863-0264

Tags: ,

The GreenHouse Group, Inc. | Real Estate Consulting & Mortgage Planning. "Moving People With Purpose."

↓ More ↓