Will FHA accept a FEMA Elevation Certificate for a condo project?

Lenders must determine whether the property improvements are located in a Special Flood Hazard Area (SFHA).  If any portion of the Structures or equipment essential to the value of the Condominium Project is located within an SFHA, then the Condominium Project  is not eligible for Condominium Project Approval, unless the Condominium Project: 

  • obtains a final LOMA or final LOMR from FEMA that removes the Property from the SFHA; or
  • obtains a FEMA National Flood Insurance Program Elevation Certificate (FEMA Form 086-0-33) prepared by a licensed engineer or surveyor.  The Elevation Certificate must document that the lowest floor, including the basement of the residential building(s), and all related improvements/equipment essential to the value of the Property is built at or above the 100-year flood elevation in compliance with the NFIP criteria, and insurance under the NFIP is obtained.
An elevation certificate is acceptable for condominium projects that are 100 percent complete, including all common elements and amenities.

A flood elevation certificate is not required when a LOMA or LOMR removes the property from a SFHA.

Insurance under the NFIP is required when a flood elevation certificate documents that the property remains located within a SFHA.

For case numbers assigned October 15, 2019 and after, additional information regarding flood insurance requirements for condominium projects can be located in:  Handbook 4000.1, Section II.C.2.c.vii.(B) available at: 

https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh 

For case numbers assigned prior to October 15, 2019, information is available in:
  • Mortgagee Letter (ML) 2011-22 Condominium Approval Process for Single Family Housing – Consolidation and Update of Approval Requirements and the attached Condominium Project Approval and Processing Guide provides the requirements and procedures for obtaining FHA condominium project approval.
  • ML 2012-18 Temporary Approval Provisions for FHA Condominium Project Approval provides temporary condominium project approval guideline changes to address current housing market conditions.
  • ML 2015-27 Additional Temporary Approval Provisions for FHA Condominium Project Approval
  • ML 2016-15 FHA Condominium Project Approval – Owner Occupancy Requirements modifies the Condominium Project Approval and Processing Guide, attachment to ML 2011-22, in order to implement the Housing Opportunity Through Modernization Act of 2016 (HOTMA) requirements and establish the required owner-occupancy percentage that must be met for purposes of FHA project approval.
Note: The Temporary Provisions in ML 12-18 and ML 15-27, as modified by ML 2016-15, are effective until HUD publishes and implements the Final Rule of Condominium Project Approval through publication of the Condominium Project Approval Section of HUD Handbook 4000.1, as extended by ML 2017-13.  Mortgagee Letters are available at:


For more information regarding condominium projects refer to:

 


All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-02384