The Federal Housing Administration (“FHA”) just adopted and in turn announced, a change in policy with respect to the ability of a condominium to secure FHA Certification. A condominium will no longer risk its certification by providing bank-owned units limited flexibility from that condominium’s leasing prohibitions. Such condominiums are now eligible for FHA certification. Going forward, condominiums currently in violation of FHA’s prohibitions against transient leasing are offered two compliance options:
- amend the condominium’s master deed, declaration and/or bylaws to remove all exemptions from transient leasing prohibitions granted to lender-owned units; or,
- provide a dated and signed statement on condominium letterhead affirming that no units are leased for a term of less than 30 days and that said condominium does not provide any tenants with services commonly associated with a hotel.