source:
  type: guide
  id: hud-4000-1-ii-c-condominiums
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — c. Condominiums
    (04/10/2025)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part II — c. Condominiums
    (04/10/2025).
  coverage_tier: operative
obligations:
- id: hud-4000-1-ii-c-condominiums-full
  canonical_id: hud-4000-1-ii-c-condominiums-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part II — c. Condominiums
    (04/10/2025)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — c. Condominiums
      (04/10/2025)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: 'c. Condominiums (04/10/2025) The Federal Housing Administration
      (FHA) will insure HECMs on Condominium Units (Units) in Approved Condominium
      Projects that have been approved under the HUD Review and Approval Process (HRAP)
      or Direct Endorsement Lender Review and Approval Process (DELRAP). In addition,
      FHA will insure HECMs on Units approved in accordance with the Single-Unit Approval
      section or that meet the definition and standards for a Site Condominium. i.
      Units Not Requiring Approval (A) Real Estate Owned Mortgages HUD Real Estate
      Owned (REO) HECM transactions do not require Condominium Project Approval or
      Single-Unit Approval. If the Unit is in a Condominium Project that has an FHA
      Condo ID, the Mortgagee must enter the FHA Condo ID when the FHA case number
      is requested. (B) HECM-to-HECM Refinances HECM Refinances do not require Condominium
      Project Approval or Single-Unit Approval. If the Unit is in a Condominium Project
      that has an FHA Condo ID, the Mortgagee must enter the FHA Condo ID when the
      FHA case number is requested. ii. Requirements for Units in Approved Condominium
      Projects The Mortgagee must verify the following requirements for individual
      Units located in an Approved Condominium Project or Legal Phase. (A) Condominium
      Project Approval Status The Mortgagee must confirm the Condominium Project is
      on the list of FHA- Approved Condominium Projects at the time of case number
      assignment and must enter the FHA Condo ID in the Federal Housing Administration
      Connection (FHAC) Case Assignment screen. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 8. Programs and Products
      - Condominiums (04/10/2025) Handbook 4000.1 753 Last Revised: 11/26/2025 (B)
      FHA Insurance Concentration (1) Definition FHA Insurance Concentration refers
      to the number of FHA-insured Mortgages within a Condominium Project. (2) Standard
      FHA may suspend the issuance of new FHA case numbers for a HECM on a Unit in
      a Condominium Project where the FHA Insurance Concentration is greater than
      50 percent of the total number of Units in the Condominium Project. (C) Form
      HUD-9991, FHA Condominium Loan Level/Single-Unit Approval Questionnaire (1)
      Definition Form HUD-9991, FHA Condominium Loan Level/Single-Unit Approval Questionnaire,
      refers to a set of questions designed to collect pertinent loan, Condominium
      Project, and Unit information for FHA insurance endorsement. (2) Standard The
      Mortgagee must submit a completed, signed, and dated form HUD-9991. (D) Owner
      Occupancy Percentage (1) Definitions Owner Occupancy Percentage refers to the
      percentage of Units considered owner- occupied as shown in the calculation.
      (2) Standard The Mortgagee must determine the Approved Condominium Project has
      an Owner Occupancy Percentage of at least 35 percent of the total number of
      Units. The Mortgagee must report the Owner Occupancy Percentage in FHAC when
      the functionality becomes available. (3) Required Documentation The Mortgagee
      must submit form HUD-9991. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 8. Programs and Products
      - Condominiums (04/10/2025) Handbook 4000.1 754 Last Revised: 11/26/2025 (4)
      Calculation For the sole purpose of calculating the Owner Occupancy Percentage,
      the numerator of the calculation for a multi-phased Condominium Project includes
      the total number of the following Units in the first declared Legal Phase and
      cumulatively in subsequent Legal Phases, or for a single-phased Condominium
      Project, all of the following Units in the numerator of the calculation: • any
      Unit that is occupied by the owner as their place of abode for any portion of
      the calendar year and that is not rented for a majority of the calendar year;
      • any Unit listed for sale, and not listed for rent, that was previously occupied
      by the owner as their place of abode for any portion of the calendar year and
      that is not rented for a majority of the calendar year; or • any Unit sold to
      an owner who intends to occupy the Unit as their place of abode for any portion
      of the calendar year and has no intent to rent the Unit for a majority of the
      calendar year. For the sole purpose of calculating the Owner Occupancy Percentage,
      the following Units are included in the denominator of the calculation for a:
      • multi-phased Condominium Project, the total number of Units in the first declared
      Legal Phase and cumulatively in subsequent Legal Phases; or • single-phased
      Condominium Project, all Units. A Unit owned by the builder or developer is
      not an owner-occupied Unit. (E) Financial Condition (1) Units in Arrears (a)
      Definition Units in Arrears refer to each Unit with Condominium Association
      dues or any special assessments that are more than 60 Days past due. (b) Standard
      The Mortgagee must verify that no more than 15 percent of the total Units are
      Units in Arrears (does not include late fees or administrative expenses). (c)
      Required Documentation The Mortgagee must submit form HUD-9991. II. ORIGINATION
      THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse
      Mortgages 8. Programs and Products - Condominiums (04/10/2025) Handbook 4000.1
      755 Last Revised: 11/26/2025 (2) Individual Owner Concentration (a) Definition
      Individual Owner Concentration refers to the percentage of Units owned by a
      single owner or Related Party. Related Party includes, but is not limited to:
      • an individual serving as the Unit owner’s officer, director, or employee;
      or • a Unit owner’s direct parent company, subsidiary, or any related entity
      with which the Unit owner shares a common officer or director. (b) Standard
      The Mortgagee must determine that for Condominium Projects with 20 or more Units,
      the Individual Owner Concentration is 10 percent or less. The Mortgagee must
      determine that for Condominium Projects with fewer than 20 Units, the Unit owner
      may not own more than one Unit. No Related Party may own a Unit. Exception Affordable
      housing Units owned by an eligible governmental or nonprofit program defined
      in 24 CFR § 203.41 are not subject to the Individual Owner Concentration requirements.
      The affordable housing Units must be identified by recorded legal documents.
      (c) Required Documentation The Mortgagee must submit form HUD-9991. (d) Calculation
      For the Individual Owner Concentration calculation: • on a multi-phased Condominium
      Project, the Individual Owner Concentration is calculated based on the total
      number of Units in the first declared Legal Phase and cumulatively on subsequent
      Legal Phases; or • on a single-phased Condominium Project, all Units are used
      in the denominator when calculating the Individual Owner Concentration, except
      unoccupied and unsold Units owned by a builder or developer, which are excluded
      from the numerator and denominator in the Individual Owner Concentration calculation.
      II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing
      Programs Reverse Mortgages 8. Programs and Products - Condominiums (04/10/2025)
      Handbook 4000.1 756 Last Revised: 11/26/2025 The Mortgagee must use the total
      number of declared Units in the Condominium Project for Complete Condominium
      Projects and Gut Rehabilitation (Gut Rehab) to calculate the Individual Owner
      Concentration. (F) Insurance (1) Walls-In (HO-6) (a) Definition Walls-In Insurance
      refers to insurance that covers the interior of the Unit and Personal Property
      inside the Unit. (b) Standard The Mortgagee must verify that the Borrower has
      obtained a Walls-In policy (HO-6) if the master or blanket policy does not include
      interior unit coverage, including replacement of interior improvements and betterment
      coverage to insure improvements that the Borrower may have made to the Unit.
      (c) Required Documentation The Mortgagee must submit form HUD-9991 and the certificate
      of insurance or complete copy of the insurance policy. (2) Hazard Insurance
      (a) Definition Hazard Insurance refers to insurance coverage that compensates
      for physical damage by fire, wind, or natural occurrences. (b) Standard The
      Mortgagee must verify that the Condominium Association has a master or blanket
      Hazard Insurance policy in place for the entire Condominium Project. The Condominium
      Association’s master or blanket Hazard Insurance policy must be in an amount
      to fully cover the insurable replacement cost of all Units and all insurable
      Common Elements in the Approved Condominium Project. The Mortgagee must verify
      that any policy with a coinsurance clause includes an agreed amount endorsement,
      selection of the agreed value option, or an amount of coverage to fully cover
      the insurable replacement cost of all Units and all insurable Common Elements
      in the Approved Condominium Project. The Mortgagee must verify that any pooled
      insurance policy satisfies the insurance coverage standard for each Condominium
      Project insured under the policy. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 8. Programs and Products
      - Condominiums (04/10/2025) Handbook 4000.1 757 Last Revised: 11/26/2025 The
      insurance policies must list the Condominium Association as the named insured,
      or, in the case of an affiliated Approved Condominium Project or Condominium
      Association, the name of the affiliated Approved Condominium Project or Condominium
      Association may be listed as a named insured. Hazard Insurance must be maintained
      over the lifecycle of the HECM. (c) Required Documentation The Mortgagee must
      submit form HUD-9991, the certificate of insurance or complete copy of the insurance
      policy, and if applicable, acceptable evidence of the replacement cost value.
      (3) Flood Insurance (a) Standard Flood Insurance for Condominiums must meet
      the requirements in Flood Insurance. The Mortgagee must verify that the Approved
      Condominium Project located in a Special Flood Hazard Area (SFHA) continues
      to meet the Flood Insurance requirements in the Condominium Project Approval
      section. The insurance policies must list the Condominium Association as the
      named insured, or, in the case of an affiliated Approved Condominium Project
      or Condominium Association, the name of the affiliated Approved Condominium
      Project or Condominium Association may be listed as a named insured. (b) Required
      Documentation The Mortgagee must submit: • form HUD-9991; • if applicable, the
      Letter of Map Amendment (LOMA), Letter of Map Revision (LOMR), or a FEMA NFIP
      Elevation Certificate (FEMA Form FF-206-FY-22-152); and • if applicable, the
      certificate of insurance or a complete copy of the Flood Insurance policy. (4)
      Exception for FHA Insurance Requirements This exception applies to Manufactured
      Home Condominium Projects, Detached Condominium Housing Projects, and Common
      Interest Housing Developments unable to satisfy the current insurance requirements.
      II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing
      Programs Reverse Mortgages 8. Programs and Products - Condominiums (04/10/2025)
      Handbook 4000.1 758 Last Revised: 11/26/2025 (a) Definitions A Manufactured
      Home Condominium Project (MHCP) refers to a Condominium Project that consists
      of two or more Manufactured Homes. A Detached Condominium Housing Project (DCHP)
      refers to a Condominium Project that has individual detached Single Family Dwelling
      Units, garage, and onsite improvements that are owned and maintained by the
      homeowner. The ground beneath the residential improvements is owned by the Condominium
      Association or Homeowners’ Association (HOA) or is under a long-term leasehold
      interest and considered common area or limited common area. A Common Interest
      Housing Development (CIHD) refers to a planned residential community that may
      consist of Units within a two- to four-unit building and/or contain multiple
      housing types, structured with different ownership interests, managed by a common
      Condominium Association or HOA, and governed under one Declaration of Covenants,
      Conditions, and Restrictions (CC&Rs). The CIHD may share a variety of common
      amenities and services. (b) Standard The Mortgagee must verify that the Unit
      owners and the Condominium Association or HOA comply with FHA insurance coverage
      requirements. (i) Manufactured Housing Condominium Project If the governing
      documents require the Unit owners to maintain all applicable property insurance
      coverage for the dwelling, site area, and any Personal Property contained within,
      the MHCP is not required to maintain: • a blanket Hazard Insurance policy, provided
      the governing documents require the Unit owners to maintain individual Hazard
      Insurance (Walls-In); • a Liability Insurance policy, provided the governing
      documents require the Unit owners to maintain individual Liability Insurance;
      or • a Flood Insurance policy, provided that the governing documents require
      the Unit owners to maintain individual Flood Insurance if the Unit has been
      identified as located in a Special Flood Hazard Area (SFHA). The Condominium
      Association or HOA must carry master or blanket insurance for Structures/improvements
      that are considered common areas of the project outside the footprint of the
      individual site. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II
      Insured Housing Programs Reverse Mortgages 8. Programs and Products - Condominiums
      (04/10/2025) Handbook 4000.1 759 Last Revised: 11/26/2025 (ii) Detached Condominium
      Housing Project If the governing documents require the Unit owners to maintain
      all applicable property insurance coverage for the dwelling, site area, and
      any Personal Property contained within, the DCHP Condominium Association or
      HOA is not required to maintain: • a blanket Hazard Insurance policy, provided
      the governing documents require the Unit owners to maintain individual Hazard
      Insurance; • a Liability Insurance policy, provided the governing documents
      require the Unit owners to maintain individual Liability Insurance; and • a
      Flood Insurance policy, provided the governing documents require the Unit owners
      to maintain individual Flood Insurance. The Condominium Association or HOA must
      carry master or blanket insurance for Structures/improvements that are considered
      common areas of the project outside the footprint of the individual site. (iii)Common
      Interest Housing Development If the governing documents require the Unit owners
      of the detached Single Family homes, Site Condominiums, duplex, or two- to four-units
      within the project to maintain and carry property insurance for the dwelling,
      site area, and any Personal Property contained therein, the Condominium Association
      or HOA is not required to maintain: • a blanket Hazard Insurance policy, provided
      the governing documents require the Unit owners to maintain individual Hazard
      Insurance; • a Liability Insurance policy, provided the governing documents
      require the Unit owners to maintain individual Liability Insurance; and • a
      Flood Insurance policy, provided the governing documents require the Unit owners
      to maintain individual Flood Insurance. The Condominium Association or HOA must
      maintain and carry master/blanket Hazard, Liability, and Flood insurance for
      the Structures that contain the attached units and the common areas of the project.
      (c) Required Documentation The Mortgagee must submit form HUD-9991 and the certificates
      of insurance or complete copies of the insurance policies. II. ORIGINATION THROUGH
      POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages
      8. Programs and Products - Condominiums (04/10/2025) Handbook 4000.1 760 Last
      Revised: 11/26/2025 (G) Leasehold Interest (1) Definition Leasehold Interest
      refers to real estate where the residential improvements are located on land
      that is subject to long-term lease from the underlying fee owner, creating a
      divided estate in the Property. (2) Standard The Mortgagee must determine if
      the Unit is owned under a Leasehold Interest and complies with the leasehold
      guidance. (3) Required Documentation The Mortgagee must document verification
      of compliance and submit the required documentation in the leasehold guidance.
      (H) Existing Less than One Year (1) Definitions Existing Less than One Year
      refers to a Property that is 100 percent complete and has been completed less
      than one year from the date of issuance of the CO or equivalent. The Property
      must have never been occupied. Complete Condominium Project refers to a Condominium
      Project consisting of Units that are Existing Less than One Year and that are
      ready for occupancy, including completion of all the Infrastructure of the Condominium
      Project, and not subject to further rehabilitation or construction. (2) Standard
      For Complete Condominium Projects, the Mortgagee must comply with the General
      Condominium Project Approval Requirements and the guidance in Construction and
      Inspection Requirements for New Construction HECM Properties. (3) Required Documentation
      The Mortgagee must submit required documentation for Existing Less than One
      Year under the guidance in Required Documentation for New Construction Properties.
      II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing
      Programs Reverse Mortgages 8. Programs and Products - Condominiums (04/10/2025)
      Handbook 4000.1 761 Last Revised: 11/26/2025 (I) Manufactured Housing (1) Definition
      Manufactured Housing refers to Structures that are transportable in one or more
      sections and meet the additional definition standards prescribed in Property
      Acceptability Criteria for Manufactured Housing for Title II Insured Mortgages.
      They may be part of an Approved Condominium Project, provided the Condominium
      Project meets applicable FHA requirements. A Manufactured Home refers to a single
      dwelling unit of Manufactured Housing. (2) Standard For a Manufactured Home,
      the Mortgagee must comply with the General Condominium Project Approval Requirements
      and the guidance in Property Types - Manufactured Housing. For HECM for Purchase
      transactions, the Mortgagee must comply with the guidance in Construction and
      Inspection Requirements for New Construction HECM Properties. (3) Required Documentation
      The Mortgagee must submit form HUD-9991 and the required documentation for Manufactured
      Housing under the guidance in Property Types - Manufactured Housing. iii. Single-Unit
      Approval Single-Unit Approval refers to approval of a Unit in a Condominium
      Project that is not an Approved Condominium Project. The Mortgagee must verify
      that the Unit and Condominium Project are in compliance with the following requirements.
      (A) Condominium Project Approval Status The Mortgagee must confirm the Condominium
      Project is not on the list of FHA- Approved Condominium Projects at the time
      of case number assignment. (B) Borrower Eligibility To be eligible for Single-Unit
      Approval, the Mortgagee must verify that the HECM Borrower: • meets the applicable
      Residual Income standard without the use of Compensating Factors; and II. ORIGINATION
      THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse
      Mortgages 8. Programs and Products - Condominiums (04/10/2025) Handbook 4000.1
      762 Last Revised: 11/26/2025 • has a Satisfactory Property Charge Payment History
      without the use of Extenuating Circumstances. (C) Property Eligibility The Mortgagee
      must confirm that the Condominium Project: • has a CO or equivalent for all
      units in the Complete Condominium Project or Complete Legal Phase; • has a CO
      or equivalent for the subject Unit that was issued at least one year ago or
      has been occupied; • has at least five Units; • is not a Manufactured Home;
      • does not have Ineligible Characteristics; and • is not located in an Approved
      Condominium Project or unapproved phase of a Condominium Project with an approved
      Legal Phase. (D) Requirements for Eligible Properties (1) FHA Insurance Concentration
      (a) Definition FHA Insurance Concentration refers to the number of FHA-insured
      Mortgages within a Condominium Project. (b) Standard FHA may suspend the issuance
      of new FHA case numbers for a HECM on a Unit in a Condominium Project when the
      FHA Insurance Concentration exceeds 10 percent of the total number of Units
      in the Condominium Project for Condominium Projects with 20 or more Units. For
      Condominium Projects with less than 20 Units, the number of FHA-insured Mortgages
      cannot exceed two. (2) Single-Unit Approval Case Number Assignment (a) Standard
      After submitting the case number assignment to Holds Tracking in FHAC, the Mortgagee
      must submit required information for case number assignment by email to the
      FHA Resource Center at: answers@hud.gov. The issuance of an FHA case number
      for Single-Unit Approval processing is not a Condominium Project Approval of
      the Unit nor the Condominium Project. All required documents and verifications
      are to be reviewed and completed as loan level requirements by the Mortgagee.
      II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing
      Programs Reverse Mortgages 8. Programs and Products - Condominiums (04/10/2025)
      Handbook 4000.1 763 Last Revised: 11/26/2025 (b) Required Documentation The
      Mortgagee must submit an email to the FHA Resource Center with the information
      requested in form HUD-9991in the following Sections: Mortgagee Information,
      Condominium Project Information, Condominium Association, and Occupancy Requirements
      by Construction Type, including the total number of Units in the Condominium
      Project for a case number assignment. Separate emails with the subject line
      “SUA Holds Tracking: Condominium Project Name” must be submitted for each case
      number requested. (3) Form HUD-9991, FHA Condominium Loan Level/Single-Unit
      Approval Questionnaire (a) Definitions Form HUD-9991, FHA Condominium Loan Level/Single-Unit
      Approval Questionnaire, refers to a set of questions designed to collect pertinent
      loan, Condominium Project, and Unit information for FHA insurance endorsement.
      Condominium Information Fee refers to a fee charged by a Condominium Association
      when requested to provide information and documentation used to determine eligibility
      for FHA-insured financing. (b) Standard The Mortgagee must submit a completed,
      signed, and dated form HUD-9991. If a condominium information fee is charged
      by the Condominium Association to complete form HUD-9991, the condominium information
      fee may be financed or paid in cash by the Borrower or Mortgagee. (4) Owner
      Occupancy Percentage (a) Definition Owner Occupancy Percentage refers to the
      percentage of Units considered owner-occupied as shown in the calculation. (b)
      Standard The Mortgagee must determine that the Condominium Project has an Owner
      Occupancy Percentage of at least 50 percent of the total number of Units. The
      Mortgagee must report the Owner Occupancy Percentage in FHAC when the functionality
      becomes available. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title
      II Insured Housing Programs Reverse Mortgages 8. Programs and Products - Condominiums
      (04/10/2025) Handbook 4000.1 764 Last Revised: 11/26/2025 (c) Required Documentation
      The Mortgagee must submit form HUD-9991. (d) Calculation For the sole purposes
      of calculating the Owner Occupancy Percentage, the numerator of the calculation
      for a multi-phased Condominium Project includes the total number of the following
      Units in the first declared Legal Phase and cumulatively in subsequent Legal
      Phases, or for a single-phased Condominium Project, all of the following Units
      are included in the numerator of the calculation: • any Unit that is occupied
      by the owner as their place of abode for any portion of the calendar year and
      that is not rented for a majority of the calendar year; • any Unit listed for
      sale, and not listed for rent, that was previously occupied by the owner as
      their place of abode for any portion of the calendar year and that is not rented
      for a majority of the calendar year; or • any Unit sold to an owner who intends
      to occupy the Unit as their place of abode for any portion of the calendar year
      and has no intent to rent the Unit for a majority of the calendar year. For
      the sole purposes of calculating the Owner Occupancy Percentage, the following
      units are included in the denominator of the calculation for a: • multi-phased
      Condominium Project, the total number of Units in the first declared Legal Phase
      and cumulatively on subsequent Legal Phases; or • single-phased Condominium
      Project, all Units. A Unit owned by the builder/developer is not an owner-occupied
      Unit. (5) Recorded Documents (a) Definition Recorded Documents refer to the
      Condominium Project’s legal, project, and governing documents that are required
      to operate legally as required by state and local law. (b) Standard The Condominium
      Project’s Recorded Documents must be recorded in accordance with applicable
      state and local law to ensure the Condominium Project can be legally operated
      in the local jurisdiction. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 8. Programs and Products
      - Condominiums (04/10/2025) Handbook 4000.1 765 Last Revised: 11/26/2025 (c)
      Required Documentation The Mortgagee must submit evidence that the Recorded
      Documents have been recorded. (6) Transfer of Control (a) Definitions Transfer
      of Control refers to the shift of existing control over the Condominium Association
      from the developer/builder to the Unit owners. Control of the Condominium Association
      refers to the ability to directly or indirectly control, direct, modify, or
      veto any action of the Condominium Association. (b) Standard The Mortgagee must
      verify Control of the Condominium Association has been transferred to the Unit
      owners and the Covenants, Conditions, and Restrictions (CC&R) have been recorded.
      (c) Required Documentation The Mortgagee must submit form HUD-9991 and recorded
      CC&Rs. (7) Financial Condition (a) Financial Stability (i) Definition Financial
      Stability refers to the ability of the Condominium Association to meet the Condominium
      Project’s needs in the future through positive cash flow and adequately funded
      reserves. (ii) Standard The Mortgagee must verify the Financial Stability of
      the Condominium Project and that: • the Condominium Association maintains separate
      accounts for operating and reserve funds; • a reserve account for capital expenditures
      and deferred maintenance that is funded with at least 10 percent of the aggregate
      of 12 months of Unit assessments, unless a lower amount is deemed sufficient
      based upon an acceptable reserve study; and II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 8. Programs and Products
      - Condominiums (04/10/2025) Handbook 4000.1 766 Last Revised: 11/26/2025 • no
      more than 15 percent of the total Units are Units in Arrears (does not include
      late fees or administrative expenses). (iii)Required Documentation The Mortgagee
      must submit form HUD-9991. (b) Financial Distress Event (i) Definition A Financial
      Distress Event refers to a Condominium Project or builder/developer that has:
      • sought protection under bankruptcy law; • been placed into receivership (mandated
      or voluntary); • been subject to foreclosure or any seizure of assets by creditors;
      or • offered a Deed-in-Lieu (DIL) of Foreclosure. (ii) Standard The Mortgagee
      must verify that a Condominium Project has not experienced a Financial Distress
      Event within the last three years. (iii)Required Documentation The Mortgagee
      must submit form HUD-9991. If applicable, the Mortgagee must submit a dated
      legal document evidencing Resolution of Financial Distress Event and a signed
      and dated explanation. (c) Individual Owner Concentration (i) Definition Individual
      Owner Concentration refers to the percentage of Units owned by a single owner
      or Related Party. Related Party includes, but is not limited to: • an individual
      serving as the Unit owner’s officer, director, or employee; or • a Unit owner’s
      direct parent company, subsidiary, or any related entity with which the Unit
      owner shares a common officer or director. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 8. Programs and Products
      - Condominiums (04/10/2025) Handbook 4000.1 767 Last Revised: 11/26/2025 (ii)
      Standard The Mortgagee must determine that for Condominium Projects with 20
      or more Units, the Individual Owner Concentration is 10 percent or less. The
      Mortgagee must determine that for Condominium Projects with fewer than 20 Units,
      the Unit owner may not own more than one Unit. A Related Party may own a Unit,
      only if the Unit is owner-occupied and meets FHA’s principal residency requirements.
      (iii)Required Documentation The Mortgagee must submit form HUD-9991. (iv) Calculation
      For the Individual Owner Concentration calculation: • on a multi-phased Condominium
      Project, the Individual Owner Concentration is calculated based on the total
      number of Units in the first declared Legal Phase and cumulatively on subsequent
      Legal Phases; or • for a single-phased Condominium Project, all Units are used
      in the denominator when calculating the Individual Owner Concentration, except
      that unoccupied and unsold Units owned by a builder/developer are excluded from
      the numerator and denominator in the Individual Owner Concentration calculation.
      The Mortgagee must use the total number of declared Units in the Condominium
      Project for Complete Condominium Projects and Gut Rehab to calculate the Individual
      Owner Concentration. (d) Commercial/Nonresidential Financial Independence (i)
      Definition Commercial/Nonresidential Financial Independence refers to the ability
      of the Residential Space and Commercial/Nonresidential Space of the Condominium
      Project to be independently sustainable such that neither portion of the Condominium
      Project is financially reliant on the other. (ii) Standard For projects with
      Commercial/Nonresidential Space, the Mortgagee must verify there is Commercial/Nonresidential
      Financial Independence. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B.
      Title II Insured Housing Programs Reverse Mortgages 8. Programs and Products
      - Condominiums (04/10/2025) Handbook 4000.1 768 Last Revised: 11/26/2025 (iii)Required
      Documentation The Mortgagee must submit form HUD-9991. For Condominium Projects
      with Commercial/Nonresidential Space, the Mortgagee must submit: • a current
      year budget approved by the board(s); • a year-to-date income and expense statement
      dated within 90 Days if the prior year to date actuals are more than 90 Days
      old; • an income and expense statement for the previous year’s actual year end
      results; and • a current balance sheet dated within 90 Days prior to the date
      of submission. (8) Insurance Coverage The Condominium Project where the single
      Unit is located must be insured to FHA standards as well as any applicable state
      and local condominium requirements. The insurance policies must list the Condominium
      Association as the named insured, or in the case of an Affiliated Condominium
      Project or Condominium Association, the name of the Affiliated Condominium Project
      or Condominium Association may be listed as a named insured. (a) Walls-In (HO-6)
      (i) Definition Walls-In Insurance refers to insurance that covers the interior
      of the Unit and Personal Property inside the Unit. (ii) Standard The Mortgagee
      must verify that the Borrower has obtained a Walls-In coverage policy (HO-6)
      if the master or blanket policy does not include interior Unit coverage, including
      replacement of interior improvements and betterment coverage to insure improvements
      that the Borrower may have made to the Unit. (iii)Required Documentation The
      Mortgagee must submit form HUD-9991 and a certificate of insurance or complete
      copy of the insurance policy. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 8. Programs and Products
      - Condominiums (04/10/2025) Handbook 4000.1 769 Last Revised: 11/26/2025 (b)
      Hazard Insurance (i) Definition Hazard Insurance refers to insurance coverage
      that compensates for physical damage by fire, wind, or natural occurrences.
      (ii) Standard The Mortgagee must verify that the Condominium Association has
      a master or blanket hazard insurance policy in place for the entire Condominium
      Project. The Condominium Association’s master or blanket Hazard Insurance policy
      must be in an amount to fully cover the insurable replacement cost of all Units
      and all insurable Common Elements in the Condominium Project. The Mortgagee
      must verify that any policy with a coinsurance clause includes an agreed amount
      endorsement, selection of the agreed value option, or an amount of coverage
      to fully cover the insurable replacement cost of all Units and all insurable
      Common Elements in the Condominium Project. The Mortgagee must verify that any
      pooled insurance policy satisfies the insurance coverage standard for each Condominium
      Project insured under the policy. Hazard Insurance must be maintained over the
      lifecycle of the HECM. (iii)Required Documentation The Mortgagee must submit
      form HUD-9991, a certificate of insurance or complete copy of the insurance
      policy, and if applicable, acceptable evidence of the replacement cost value.
      (c) Liability Insurance (i) Definition Liability Insurance refers to insurance
      that protects against legal claims. (ii) Standard The Mortgagee must verify
      that the Condominium Association maintains comprehensive Liability Insurance
      for the entire Condominium Project, including all common areas, elements, public
      ways, and all other areas that are under its supervision, in the amount of at
      least $1 million for each occurrence. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 8. Programs and Products
      - Condominiums (04/10/2025) Handbook 4000.1 770 Last Revised: 11/26/2025 Liability
      Insurance must be maintained over the lifecycle of the HECM. (iii)Required Documentation
      The Mortgagee must submit form HUD-9991 and a certificate of insurance or complete
      copy of the insurance policy. (d) Fidelity Insurance (i) Definition Fidelity
      Insurance refers to insurance that protects the Condominium Association against
      employee dishonesty, crime, or other fraudulent acts conducted by one or more
      employees. (ii) Standard The Mortgagee must verify that for all Condominium
      Projects with more than 20 Units, the Condominium Association maintains Fidelity
      Insurance for all officers, directors, and employees of the Condominium Association
      and all other persons handling or responsible for funds administered by the
      Condominium Association. The Mortgagee must verify that the insurance coverage
      is the greater of either: • three months of aggregate (12-month) assessments
      on all Units plus reserve funds (up to the maximum permitted by state law);
      or • the minimum amount required by state law. For existing policies, an uninsured
      amount within 3 percent of the above calculation or $10,000, whichever is less,
      is acceptable. If the Condominium Project engages a management company, the
      policy or policies must demonstrate that they specifically meet the standard
      for both the Condominium Association and the management company. (iii)Required
      Documentation The Mortgagee must submit form HUD-9991 and the certificate of
      insurance or a complete copy of the insurance policy from the Condominium Association
      and/or from the management company. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 8. Programs and Products
      - Condominiums (04/10/2025) Handbook 4000.1 771 Last Revised: 11/26/2025 (e)
      Flood Insurance (i) Standard The Mortgagee must ensure that the Flood Insurance
      for a Condominium Unit meets the requirements in/under Flood Insurance for an
      FHA-insured Mortgage. The Mortgagee must verify that Units in a Condominium
      Project located in a SFHA meet the Flood Insurance requirements in the Condominium
      Project Approval section. (ii) Required Documentation The Mortgagee must submit
      form HUD-9991 and the required documentation in the Condominium Project Approval
      section. (f) Exception for FHA Insurance Requirements The Mortgagee must verify
      that the Unit owners and Condominium Association or HOA comply with FHA insurance
      coverage requirements. (i) Detached Condominium Housing Project Eligibility
      If the governing documents require the Unit owners to maintain all applicable
      property insurance coverage for the dwelling, site area, and any Personal Property
      contained within, the DCHP Condominium Association or HOA is not required to
      maintain: • a blanket Hazard Insurance policy, provided the governing documents
      require the Unit owners to maintain individual Hazard Insurance (Walls-In);
      • a Liability Insurance policy, provided the governing documents require the
      Unit owners to maintain individual Liability Insurance; and • a Flood Insurance
      policy, provided the governing documents require the Unit owners to maintain
      individual Flood Insurance. The Condominium Association or HOA must carry master
      or blanket insurance for Structures/improvements that are considered common
      areas of the project outside the footprint of the individual site. (ii) Common
      Interest Housing Development Project If the governing documents require the
      Unit owners of the detached Single Family homes, Site Condominiums, duplex,
      or two- to four-units within the project to maintain and carry property insurance
      for the dwelling, site II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT B. Title
      II Insured Housing Programs Reverse Mortgages 8. Programs and Products - Condominiums
      (04/10/2025) Handbook 4000.1 772 Last Revised: 11/26/2025 area, and any Personal
      Property contained therein, the Condominium Association or HOA is not required
      to maintain: • a blanket Hazard Insurance policy, provided the governing documents
      require the Unit owners to maintain individual Hazard Insurance; • a Liability
      Insurance policy, provided the governing documents require the Unit owners to
      maintain individual Liability Insurance; and • a Flood Insurance policy, provided
      the governing documents require the Unit owners to maintain individual Flood
      Insurance. The Condominium Association or HOA must maintain and carry master/blanket
      Hazard, Liability, and Flood Insurance for the Structures that contain the attached
      units and the common areas of the project. (iii)Required Documentation The Mortgagee
      must submit form HUD-9991 and certificates of insurance or complete copies of
      the insurance policies. (9) Projects in Coastal Barrier Resources System or
      Special Flood Hazard Areas (a) Projects in Coastal Barrier Resources System
      If any part of the Condominium Project is located within the Coastal Barrier
      Resources System (CBRS), the Condominium Project is not eligible for FHA Single-Unit
      Approval. (b) Special Flood Hazard Areas If any portion of the Structures or
      equipment essential to the value of the Condominium Project is located within
      an SFHA, then the Condominium Project is not eligible for Condominium Project
      Approval, unless the Condominium Project meets the Special Flood Hazard Areas
      requirements in the Condominium Project Approval section. (10) Commercial/Nonresidential
      Space (a) Definitions Commercial/Nonresidential Space refers to floor area allocated
      to: • retail and commercial square footage (excludes Live/Work Units); • multilevel
      parking garage square footage that is separate from multilevel parking garage
      square footage allocated to residential Unit owners; II. ORIGINATION THROUGH
      POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse Mortgages
      8. Programs and Products - Condominiums (04/10/2025) Handbook 4000.1 773 Last
      Revised: 11/26/2025 • building common areas not reserved for the exclusive use
      of residential Unit owners; and • any square footage that is owned by a private
      individual or entity outside of the Condominium Association. Residential Space
      refers to floor area allocated to: • all Unit square footage; • all building
      common area square footage exclusively for the use of residential Unit owners;
      and • all parking garage square footage allocated to residential Unit owners.
      Parking lot square footage is not considered Residential or Commercial/Nonresidential
      Space. Total Floor Area refers to all Residential Space and Commercial/Nonresidential
      Space. (b) Standard The Mortgagee must verify that the Condominium Project’s
      Commercial/Nonresidential Space does not exceed 35 percent of the Condominium
      Project’s Total Floor Area. (c) Required Documentation The Mortgagee must submit
      the following documentation: • form HUD-9991; • recorded condominium site plans;
      and • recorded CC&Rs. (11) Live/Work Unit (a) Definitions A Live/Work Condominium
      Project refers to a Condominium Project that allows space within the individual
      Unit to be used jointly for nonresidential and residential purposes. A Live/Work
      Unit refers to a Unit in a Live/Work Condominium Project. (b) Standard The Mortgagee
      must verify that the Condominium Project governing documents allow Live/Work
      arrangements. The Mortgagee must verify that the individual Live/Work Unit does
      not contain more than 49 percent Commercial/Nonresidential Space. II. ORIGINATION
      THROUGH POST-CLOSING/ENDORSEMENT B. Title II Insured Housing Programs Reverse
      Mortgages 8. Programs and Products - Condominiums (04/10/2025) Handbook 4000.1
      774 Last Revised: 11/26/2025 (c) Required Documentation The Mortgagee must submit
      form HUD-9991. (12) Leasehold Interest (a) Definition Leasehold Interest refers
      to real estate where the residential improvements are located on land that is
      subject to long-term lease from the underlying fee owner, creating a divided
      estate in the Property. (b) Standard The Mortgagee must determine if Condominium
      Projects with Units or Common Elements owned under a Leasehold Interest are
      eligible and meet the following requirements: • The Condominium Association
      must be the lessee under the lease. • The lease of the Common Elements provides
      that a default of the Condominium Association does not result in a disturbance
      of any rights of the Unit owners. • The lease provides that the Mortgagee receives
      notice of any monetary or Non-Monetary Default by the Condominium Association
      and is given the right to cure any defaults on behalf of the Condominium Association.
      • The lease provides for the payment of taxes and insurance related to the land,
      in addition to those being paid for the improvements. • The Condominium Association
      must not be in default under any provisions of the lease. • The lease does not
      include any default provisions that could result in forfeiture or termination
      of the lease except for nonpayment of lease rents. • The Condominium Project
      must comply with the Title II Leasehold guidance as applicable. (c) Required
      Documentation The Mortgagee must submit the lease and comply with the required
      documentation in the Leasehold guidance. (13) Litigation (a) Definition Litigation
      refers to a current or pending lawsuit or proceedings in a court, arbitration,
      or mediation involving the Condominium Project or Condominium Association, or
      those concluded within 12 months of the II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 8. Programs and Products
      - Condominiums (04/10/2025) Handbook 4000.1 775 Last Revised: 11/26/2025 application
      date. Litigation does not include foreclosure or actions to collect past due
      assessments brought by the Condominium Association or Condominium Project as
      plaintiff. (b) Standard The Mortgagee must verify that the Condominium Project
      or Condominium Association is not subject to Litigation that relates to the
      safety, structural soundness, habitability, or functional use of the Condominium
      Project. The Mortgagee must verify that the Condominium Project or Condominium
      Association is not subject to any other Litigation risk not covered by insurance
      or that exceeds the amount of insurance coverage relating to the potential losses
      for that matter. (c) Required Documentation The Mortgagee must submit form HUD-9991.
      iv. Site Condominium (A) Definition A Site Condominium refers to: • a Condominium
      Project that consists entirely of Single Family detached dwellings that have
      no shared garages, or any other attached buildings; or • a Condominium Project
      that: • consists of Single Family detached or horizontally attached (townhouse-
      style) dwellings where the Unit consists of the dwelling and land; • does not
      contain any Manufactured Housing Units; and • is encumbered by a declaration
      of condominium covenants or a condominium form of ownership. (B) Standard The
      Unit owner must be responsible for all required insurance and maintenance costs
      associated with the Unit dwelling, excluding landscaping, of the Site Condominium.
      Site Condominiums do not require Condominium Project Approval or Single-Unit
      Approval. (C) Required Documentation The Mortgagee must submit the following
      documentation: • Condominium Rider; II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      B. Title II Insured Housing Programs Reverse Mortgages 8. Programs and Products
      - Condominiums (04/10/2025) Handbook 4000.1 776 Last Revised: 11/26/2025 • appraisal
      completed on Fannie Mae Form 1073/Freddie Mac Form 465, Individual Condominium
      Unit Appraisal Report, evidencing that all Units satisfy the Site Condominium
      definition; • certificate of Hazard Insurance or complete copy of the insurance
      policy evidencing coverage of the entire dwelling; and • if required under the
      Flood Insurance requirements in the Condominium Project Approval Section, certificate
      of Flood Insurance or complete copy of the insurance policy evidencing coverage
      of the entire dwelling. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT C.
      Condominium Project Approval'
  judgment: false
