FHA/VA Certification Disclosures
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FHA/VA CERTIFICATION DISCLOSURES

Condominium Associations. Beginning January 1, 2016, condominium associations must disclose their status as a Federal Housing Administration (FHA) approved and a Department of Veterans Affairs (VA) approved condominium project. This only applies to condominium associations not planned developments. (Civ. Code §5300(b)(10)-(11).)

Form of Disclosure. The disclosure must be part of the association's annual budget report to the membership 30 to 90 days before the end of its fiscal year. They must include the following disclosure:

FHA Statement

Certification by the Federal Housing Administration may provide benefits to members of an association, including an improvement in an owner’s ability to refinance a mortgage or obtain secondary financing and an increase in the pool of potential buyers of the separate interest.

This common interest development [is/is not (circle one)] a condominium project. The association of this common interest development [is/is not (circle one)] certified by the Federal Housing Administration.

VA Statement

Certification by the federal Department of Veterans Affairs may provide benefits to members of an association, including an improvement in an owner’s ability to refinance a mortgage or obtain secondary financing and an increase in the pool of potential buyers of the separate interest.

This common interest development [is/is not (circle one)] a condominium project. The association of this common interest development [is/is not (circle one)] certified by the federal Department of Veterans Affairs.

Font & Separate Paper. The disclosure statement must be in at least 10-point font on a separate piece of paper. (Civ. Code §5300(b)(10)-(11).)

Recommendation: So as to avoid creating potential liability for themselves, associations should add two more sentences to each disclosure. The first should state that information regarding the association's FHA/VA status is as of a particular date. That way if the association's status were to change after the disclosure was made, a buyer and seller in escrow can't claim they were misled. The second sentence should direct people to check the FHA website  and  VA website for current information.

ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.

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