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Q&A: FHA Requirements for Buyer?

Q I am a member of the governing board for our condominium. One of our unit owners has a buyer for her unit and the buyer’s proposed mortgagee asked our board to sign one of the new FHA Project  Certification forms—should we?  

 —Sign Here  

A “The short answer is ‘no—at least not without informed legal counsel,” says attorney Joseph Saurino of the Braintree, MA law firm of Marcus, Errico,  Emmer & Brooks. “FHA’s new proposed Project Certification form as presently written is ominous,  unfair, and potentially dangerous for condominium boards and/or managers to  sign. For example, FHA’s “standard” proposed form unreasonably requires a condominium board member or manager to  certify, among other things, both that the condominium complies with all state  and federal laws, and that the condominium complies with all FHA requirements—opinions of this type should more appropriately be researched and answered by  either an attorney or by the lender or FHA submission company, not condominium  board members or managers.  

 “Moreover, the penalties for false statements made in an FHA Project  Certification form are up to 30 years in jail and $1 million in fines—enough said? FHA’s legitimate interests can, and should, be addressed with answers to a handful  of reasonable questions about the association that either an informed board  member or manager could reasonably be expected to provide without signing up  for law school—not the types of draconian, far-reaching questions that FHA’s proposed Project Certification form unfairly requires under the threat of jail  time or serious financial jeopardy for a misstep by an innocent, disinterested  board member or manager.”