HUD/FHA approval withdrawn; can't get a loan to repair

Started by MelissaS1 • 8 replies • 1684 views

💬 Join us to post & get advice from 50,000 HOA & Condo leaders.

⚡ Takes 30 seconds

Already a member? Log in

MelissaS1 (Washington)
Posts: 22

Posted:

Here is a real "Alice in Wonderland" scenario.

Like many condos built in the 70's, our building envelope has outlived it's useful life and must be replaced-roof, siding, decks and windows.

We've had a building defect architect investigate our building, draw up plans, develop a budget with contingencies built in, and bid it out. Now we have a contractor ready to go, and we can't get financing because HUD/FHA has withdrawn our guarantee approval!

They did this, they explain, because we recently settled a lawsuit with a roofing company over a bad repair job that netted us $50,000. They say they cannot reinstate our approval until we fix the roof. But $50,000 isn't near enough for the roof, much less the entire project, so, of course we have to get a loan to do the project!

So, if we hadn't sued the roofer we'd be $50,000 weaker, but we could still get a loan?? Where's the sanity?

Does anyone have any ideas?

Melissa

GlenL (Ohio)
Posts: 5,491

Posted:

Melissa you are going to have to fix the roof anyway and if $50,000 isn't enough to do it, you would need to take out the loan anyway. Just out of curiosity when you applied for the HUD/FHA loan you told them you have x# of dollars and would the government please help. Now you have more money and the government wants to make sure that you spend the money for what it's earmarked for, fixing the roof. Did you really expect that they would let the Association just pocket the money while the American taxpayers bail you guys out?

Studies show that 5 out of 4 people have problems with fractions

DonnaM6 (South Carolina)
Posts: 9

Posted:

It appears you will have to levy a special assessment to cover the deficiency between the $50,000.00 and the cost of replacing the roof.

Donna

MelissaS1 (Washington)
Posts: 22

Posted:

Glenn,

Perhaps you didn't understand my explanation. We did not apply to, nor ask HUD/FHA for help. We were turned down for a loan by two banks because FHA lists our condo as "withdrawn" [FHA guarantee withdrawn]for the reasons I explained. We are not "pocketing" anything. The $ are in a special insurance settlement account as is required by our declaration, and ready to be spent on the roof when we can get individual homeowner loans to cover the special assessment which will be levied. We are not asking for a government handout-we simply want them off our backs.

GlenL (Ohio)
Posts: 5,491

Posted:

Have you tried contacting them directly and asking just what has to be done? I know it doesn't seem like it at times but the people working for the government are actually supposed to assist you. If they do not have everybody in the building write to their congressman & senators. The squeaky wheel gets the grease, especially in an election year.

Studies show that 5 out of 4 people have problems with fractions

MelissaS1 (Washington)
Posts: 22

Posted:

Thanks Glen,

We are about to try to appeal to them, but I was hoping to hear from anyone out there in the community who has done this and what results they got. We'll probably only have one shot at persuading them, so I was hoping to hear from anyone who's given it a shot.

It all depends on if the withdrawal is out of their hands legally, or if they have some ability to make a reasoned judgement.

In addition, I've already drafted an appeal to our representatives in Congress if that becomes necessary-I see we're thinking along the same lines there. I like your idea of all the homeowners sending out letters, not just the board.

Thanks,

Melissa

SusanW1 (Michigan)
Posts: 5,202

Posted:

Sounds like the government: if you have absolutley NOTHING, you can get the benefits. If you have a LITTLE, then you are no longer eligible.

Spend the $ and get the roof repaired. You will not only have NOTHING, but you will also be in neceddary debt!

THEN approach them again for help.

MelissaS1 (Washington)
Posts: 22

Posted:

You can't spend what you don't have-and unlike all of the greedy flakes who became real estate tycoons with sub-prime loans, WE CAN'T BORROW ANY!! (is anyone listening?)

Melissa

MelissaS1 (Washington)
Posts: 22

Posted:

You can't spend what you don't have-and unlike all of the greedy flakes who became real estate tycoons with sub-prime loans, WE CAN'T BORROW ANY!! (is anyone listening?)

Melissa

🎯 You've read this entire discussion

Join the conversation with 50,000 HOA & Condo Leaders:

✓ Ask follow-up questions
✓ Share your experience
✓ Get expert advice
✓ Access 350,000 discussions

Create Free Account →

⚡ Takes 30 seconds

Already a member? Log in here