4580.1

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TABLE OF CONTENTS

Paragraph Page

CHAPTER 1. INTRODUCTION

1-1. Condominium Characteristics 1-1

1-2. Program Characteristics (Summary) 1-2

1-3. Establishment of a Condominium Regime 1-7

1-4. Off-Site Recreation or Service Corporations 1-7

1-5. HUD-FHA Insurance Programs for Condominiums 1-8

1-6. Unsubsidized vs Subsidized Unit Mortgages in a

Condominium 1-10

1-7. Section 221(i) 1-10

1-8. VA Guarantee of Loans on HUD-FHA Approved Condominiums 1-10

CHAPTER 2. GENERAL REQUIREMENTS

2-1. General 2-1

2-2. Feasibility Considerations 2-2

Figure 1 - Developing a Condominium 2-3

CHAPTER 3. APPLICATIONS

3-1. Application Requirements 3-1

CHAPTER 4. COMMITMENTS

4-1. Commitment Requirements 4-1

CHAPTER 5. CLOSINGS

5-1. Closing Requirements 5-1

5-2. Condominium Organizational Documents 5-2

5-3. FHA Model Forms Applicable to the Project Mortgagor 5-3

5-4. Guidelines for Condominium Management 5-5

5-5. Review of Documents 5-8

5-6. Fiscal Management of Condominiums 5-11

5-7. Prevailing Wage Requirements 5-12

5-8. Cost Certification Requirements 5-12

5-9. Retention of Project Files 5-14

5-10. Reference to Section 234(c) for Processing

Individual Unit Phase and in Simplified Procedures

for Insurance Upon Completion Cases 5-14

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Paragraph Page

CHAPTER 6. COST ESTIMATION AND PROCESSING

6-1. Proposed Section 234(d) Projects 6-1

CHAPTER 7. ARCHITECTURAL REQUIREMENTS

7-1. General Requirements for Section 234(d) Projects 7-1

CHAPTER 8. VALUATION PROCESSING

8-1. General 8-1

8-2. Proposed Construction 8-1

8-3. Feasibility Stage 8-2

8-4. Valuation Processing 8-3

8-5. Feasibility Determination 8-5

8-6. Project Mortgage Limitation in Presold Projects 8-5

8-7. Project Mortgage Limitation in Projects Where the

Units Have not Been Presold 8-5

8-8. Revision of Commitment Forms 8-6

8-9. Conditional Commitment Stage 8-6

8-10. Firm Commitment Stage 8-6

8-11. Existing Construction 8-7

8-12. Rehabilitation Projects 8-7

CHAPTER 9. MORTGAGE CREDIT

9-1. General 9-1

9-2. Amount and Amortization Period of Loan 9-1

9-3. New Construction 9-1

9-4. Rehabilitation 9-3

9-5. Term of Mortgage 9-4

9-6. Schedule of Family Units 9-4

9-7. Insurance of Advances 9-4

9-8. Operating Loss Loans \-- Two Year Operating Losses 9-4

9-9. Rehabilitation Projects 9-4

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INDEX OF CONDOMINIUM FORMS

Appendices FHA Forms

1 180 Condominium Analysis and Appraisal

2 2205 Borrowers Certificate of Actual Cost

3 3201 Application for Mortgage Insurance and Instructions

4 HM-93211 Monthly Report of Cooperative Projects

5 3212-A Mortgagor\'s Certificate

6 3214 Mortgage Rider - Insurance of Advances

7 3220 Mortgagee\'s Certificate

8 3236-A Model Form of Certificate of Incorporation

9 3236-B Model Form of Certificate of Incorporation

10 HM-93240 Operating Budget for Cooperative Housing Corporations

11 3254-B Regulatory Agreement

12 3257 FHA Required closing Instruments (Initial Endorsement

Insurance of Advances)

13 3257-G Final Endorsement - Insurance of Advances

14 3257-H Insurance upon Completion (Simplified processing)

15 3275 Commitment for Insurance of Individual Mortgage

16 3275-A Blanket Commitment for Insurance of Individual

Condominium Mortgages

17 3275-B Commitment for Insurance of Individual

Condominium Mortgages

18 3276 Plan of Apartment Ownership

19 3276-A Enabling Declaration

20 3276-B Model Form of Enabling Declaration

21 3277 By-Laws

22 3277-A Model Form of By-Laws

23 3279 Model Form of Subscription and Purchase Agreement

24 3280 Mortgagee\'s Application for Blanket Commitment

25 3280-A Schedule of Units

26 3281 Model Form of Management Agreement for Condominium

27 3282 Schedule of Family Unit Sales

28 3283 Commitment for Insurance of Advances

29 3284 Commitment to Insure Upon Completion

NOTE: FHA Form 3278 (Regulatory Agreement) can be found

in the Section 234(c) Handbook as it pertains only

to regulation of the individual units of a condominium

regime.

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FOREWORD

This Handbook covers the project phase of condominiums which are to be

constructed or rehabilitated under Section 234(d). It also contains the

basic documents and instructions for creating a condominium regime. The

Mortgage Insurance Handbook for Condominium Housing Insured Under
Section

234(c) of the National Housing Act, Reference (1) of the Foreword,

contains the requirements and instructions for insuring mortgages in the

individual unit phase. The Section 234(c) Handbook also contains

instructions and requirements for converting a project that was
encumbered

by a mortgage insured under other Sections of the Act to individual

condominium estates under a condominium regime.

NOTE: The MORTGAGE INSURANCE HANDBOOK FOR CONDOMINIUM HOUSING INSURED

UNDER SECTION 234(c) OF THE NATIONAL HOUSING ACT covers the

instructions for insuring the mortgages of the individual units

after the project phase (Section 234(d)) has been completed and

in cases of 11 or less units where no project mortgage is

required.

Legal Authority:

Subchapter L - Condominium Housing Insurance

Subpart A - Eligibility Requirements for Individually Owned Units

(234.1 - 234.249)

Subpart B - Contract Rights and Obligations Individually Owned

Units (234.251 - 234.290 and 203.251 - 203.435 except

as provided in 234.255).

Subpart C - Eligibility Requirements for Projects - Conversion

Individual Sales Units (234.501 - 234.700 and 207 except

as provided in 234.501)

Subpart D - Contract Rights and Obligations - Projects - Conversion

Individual sales Units (234.751 - 234.850 and 207.251

except as provided in 234.751)

References:

\(1\) 4265.1 - Home Mortgage Insurance - Condominium Units,

Section 234(c) Handbook

\(2\) 4445.1 - Underwriting - Technical Direction for Multifamily

Mortgage Insurance Handbook

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References: (continued)

\(3\) 4150.1 - Valuation Analysis Handbook for

Home Mortgage Insurance

\(4\) 4110.1 - Fiscal and ADP Handbook

\(5\) 4410.1 - Project Fiscal Procedures Handbook

\(6\) 4550.1 - Basic Cooperative Housing Insurance Handbook

\(7\) 4550.5 - Investor-Sponsor and Non-profit Sponsorship of

Housing Cooperatives Handbook

\(8\) HM 4371.2 - Cooperative Accounting Handbook - Manual

\(9\) HM 4371.3 - Cooperative Accounting Handbook - Computer

\(10\) HM 1340.3A - Labor Standards and Labor Relations

\(11\) 4460.1 - Architectural Analysis and Inspections Handbook for

Project Mortgage Insurance

\(12\) 4145.1 - Architectural Processing and Inspections for

Home Mortgage Insurance

\(13\) 4465.1 - Valuation Analysis for Project Mortgage Insurance

\(14\) 4470.1 - Mortgage Credit Analysis for Project Mortgage

Insurance

Cancellations: This Handbook cancels Volume VII, Book 1, Paragraphs

71980.20 thru 71980.26; Volume VII, Book 2, Paragraphs 72734 thru

72734.2; Paragraphs 72977 thru 72986; Paragraphs 73099 thru 73099.9 of

the FHA Manual; Circular 4415.14 and HPMC-FHA Guide 4440.3.

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