1.

FHA Spot Approval (available for existing buildings for FHA case
numbers started before February 1, 2010)
The FHA spot approval process has been an efficient method to approve FHA
financing on condo buildings. The FHA spot approval is similar to the condo
approval process for conventional loans. The attached Spot Approval Questionnaire
is completed by the condo association and submitted along with the appraisal,
condo declarations, by-laws, budget and insurance. Our condo review department
reviews all of the submitted items to confirm that they conform with FHA’s
guidelines. This process is straight forward and simple. However, the spot approval
process had some drawbacks. The spot approval process was not available for
condo building with less than 4 units, condos with the first right of refusal were not
eligible and the spot approval was only for the individual borrower/specific unit (not
the entire building). If another borrower wanted FHA financing in the same building
they would be required to get a new FHA spot approval.

2. FHA Full Condo Approval (available for new or existing buildings for
FHA case numbers started before or after February 1, 2010)
The FHA full condo approval process is a more elaborate condo approval process
and will take additional time for the first approved unit in a building. However, once
the first unit is approved by FHA the building becomes FHA approved and the
required documentation for subsequent units is significantly less. Below are some
of the major advantages of the full FHA condo approval process:

a. Buildings with as few as 2 units will be eligible (previously buildings were

required to have at least 4 units)
b. The first right of refusal may be allowed unless it violates discriminatory
conduct under the FHA regulation at 24 CPR Part 100
c. The FHA concentration limits are more generous (up to 100% FHA
concentration for established projects)
d. New buildings can be approved with as few as 30% conveyed or under
contract to owner occupied purchasers.

The attached New FHA Condo Matrix file provides detailed guidelines and
documentation requirements for new/existing/conversion/FHA approved buildings. I
also attached the condo questionnaire for the full condo review, the questionnaire
for approved buildings and builder certification requirements. Once all of the
documentation is received, Guaranteed Rate will review and provide an initial
approval. After Guaranteed Rate provides the initial approval, the documentation
will be sent directly to FHA by Guaranteed Rate for a final approval.

The following fees will be charged to complete a FULL FHA condominium project
review.
New Condo Projects with 1-10 Units $500 Established Condo Projects with
1-10 Units $250
New Condo Projects with 11-20 Units $750 Established Condo Projects with
11-20 Units $500
New/Established Condo Projects with 20+ Units $1000 (minimum)
**Fees subject to change based on the complexity of a condo project and review**