I have a loan that is stalled with Flagstar right now due to a spot approval issue.  One of the questions is whether or not the HOA has the first right of refusal.  The U/W and the HOA manager are confused on to exactly what this means.  Can anyone shed some light on this part of the spot approval form?  Also, the HOA manager has no clue as to what percent of units have FHA mortgages on them.  How can I find this information?

Your title company can find out which units have FHA vs Conv as for the form look on HUD.gov

Here is a good overview of what a FROR is: http://cooperator.com/articles/1655/1/What-Your-Board-Should-Know/Page1.html  Basically, the association can refuse the sale or lease of a unit to someone even though the unit owner may want to proceed with the transaction.

The issue of finding out how many units have FHA mortgages on them is easily done by checking county records, but it is often very time consuming.  If your title company is willing to do the research, I would suggest marketing the complex for more loans since you would have the relevant research already done for more Spot Approvals.  Some title companies wont want to do this research if it is too time consuming or they may charge your customer for the hours put into the research.

Having done it before in the past, can be a pain in the ass if its a big complex. Title companies love searching when theirs a couple hundred or thousand units LOL. FROR is expalined above, normally you won't have an issue unless you run into what happened to me once where the association and seller freaked out about an FHA loan and how FHA loans take too long to close and aren't good loans blah blah and refused it....even though I had full approval and waiting on 1 item for ctc, idiots.

Here is a good link to keep bookmarked regarding spots:

http://www.fhainfo.com/condos.htm

I am assuming that if the property is not already FHA approved, which is why you are requesting a spot approval, then chances are that the percentage of units that FHA loans is 0%.

I'm in the process of one right now, and generally speaking, so long as the property adheres to all the guidelines, the overall process shouldn't take more than a week or two.

Bill:

I have a loan that is stalled with Flagstar right now due to a spot approval issue.  One of the questions is whether or not the HOA has the first right of refusal.  The U/W and the HOA manager are confused on to exactly what this means.  Can anyone shed some light on this part of the spot approval form?  Also, the HOA manager has no clue as to what percent of units have FHA mortgages on them.  How can I find this information?

Bill you have mail, do not want to answer on an open forum.

Small world!!!