As we recently blogged, there have been quite a few condominium communities whose FHA (re)certification applications got rejected because their governing documents allow leases of less than 30 days.
We also blogged about a new option for condominium boards to provide HUD with written affirmations accompanying their applications representing there are no units in the community that are currently leased for a term less than 30 days.
Now we provide you with further clarification concerning the affirmative representation option mentioned above:
1. The representation cannot use the phrase “to the best of my knowledge”; it must contain an affirmative statement representing there are no units currently leased for less than 30 day terms or providing hotel services.
2. The above representation is only for the time when the statement is signed; If the day after the representation is made, a lease of less than 30 days was to be signed, this would not impact the representation.
3. The representation statement can only be signed by a board member. It cannot be signed by a manager or CPA.
4. This exception only applies to the 30 day mortgage exception. If a declaration contains other language allowing less than 30 day leases, the declaration will still need to be amended.
We anticipate additional clarifications will come from FHA with respect to this exception as the process continues. Stay tuned for updates as they develop!