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FHA loans and Condos — important to know the rules
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Have you heard about the HRAP/DELRAP system? It lists condo developments that meet eligibility requirements set the Federal 
Housing Administration.
If you are interested in a purchasing a Colorado Springs Condo, your ability to get an FHA loan will depend on an “approved” rating by HRAP/DELRAP system.
DELRAP stands for Direct Endorsement Lender review and Approval Process and the rules aim to prevent risky loans. There are a variety of reasons that a complex may be labeled “rejected”:
- More than 15% of homeowners in a development are delinquent on the HOA dues (This could be the result of homeowners in foreclosure)
- One investor or entity owns more than 10 percent of the project
- Less than 50% of the project is either sold or owner occupied
- More than half of the homeowners have FHA loans
You can go to HUD’s web site, and search for information on specific communities, you can even search by zip code. I’m not sure that the database is fully populated, so some developments that deserve a “rejected” rating may still be added.
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Kathy (719-287-1049) KTorline@msn.com
