March 2012. The FHA adjusted an element of the certification requirement for condominium associations. Previously, management companies had to provide a separate fidelity bond insuring the association as well as themselves (creating insurance problems for management companies). The FHA is dropping the requirement for those management companies named as additional insured on the association's policy. However, Fannie Mae continues to require that management companies carry their own fidelity coverage.
Recommendation: Boards wanting to meet FHA and Fannie Mae requirements should talk to their association's insurance broker.
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