Hello Janet,HUD will not approve a unit in a condo project that limits their ability to mitigate any losses since they may well end up owning the unit if you or your heirs decide you no longer want the home at the end of the term.Therefore, they would not approve a project that limited to whom the unit could be sold, rented, etc. Such limitations could represent additional losses until a property could be sold.As for the proprietary programs, the lowest value acceptable I am aware of for these programs is $450,000. They are intended to be used for jumbo loans and are sometimes used as a HUD alternative but the investors who offer this product do not seek homes that are within HUD lending limits but just do not meet HUD requirements. I am sorry, I do not have any specific recommendations for condominium projects that will not meet the HUD requirements or alternatives to HUD reverse mortgage programs for properties in this value range.

Hello Joie, Who is telling you that the approval is too expensive? The HOA? HUD does not charge to approve the project and so it is just a matter of supplying all the documentation that they require which the HOA should have. There are some companies who will gather and submit the information to HUD on behalf of homeowners who must do it on their own and no longer have all the CC&R's, by-laws, budgets, etc., but the HOA should have all the HUD required documentation at hand and it would just be a matter of following the HUD checklist to submit for approval. If they wanted to hire a company to do it for them, most companies like FHA Condo Approvals (fhacondosapproval.com) guarantee approval or there is no fee. They can do this because they know exactly what HUD requires and they know if HUD will approve the project just by gathering the necessary information. After they see the information, they know it is just a matter of submission and waiting for the approval. I have not checked for quite some time on their pricing, but it did not seem high to have the project approved. I am afraid you have been misled by either an HOA that is not experienced and does not want to go to through the work of getting the project approved or they have been advised by the board that they do not want FHA/HUD approval because many people have the mistaken opinion that once a project is FHA approved, it lets the "wrong kind" of people buy in the project. Not only is that discriminatory, but it is incorrect. Most of the time that is a disservice to current owners who could benefit from the programs FHA has to offer like the reverse mortgage program, but it also would help all current owners by opening up a broader buying market when they try to sell. Many potential buyers now are shut out of buying the units in your project because they use FHA financing. That hurts everyone when they go to sell (and potentially values). With regard to the question of discrimination because HUD requires the project to be approved and they will not approve all projects, it absolutely is not discriminatory as the approval process is based on the strength, the viability and the marketability of the project and not anything to do with the demographics of the owners, the ages or any other feature that would be discriminatory to underwrite. For example, HUD verifies that the project does not have a majority of rentals in the project to be approved HUD can support through thousands of loans in thousands of projects that projects that fail most often are those that are mainly used for rental and are not unit owner occupied. The dues fall behind and the project becomes rundown which hurts the units' marketability. Projects with insufficient budgets or insurance are at risk of failure. Projects currently in litigation for something that they have no insurance coverage that would protect them should they lose are at risk. These are just some of the things that HUD reviews the documents to check for. Condominiums already lose their value faster than single family residences when markets do soften, HUD just wants to be sure there are not other layers of risk that would cause an entire project to fail before they begin to insure loans in various projects. That's why they require that projects must be reapproved every 2 years. Circumstances change and they do not want to take on too much exposure in a project that has experienced changes that create unacceptable risks. There are many circumstances with single family homes that render the homes uninsurable for the HUD programs as well. It doesn't mean that the home is not a nice property or that the borrower is not a good borrower. It just means that the property does not meet HUD's risk guidelines and therefore cannot be used to secure a home for HUD/FHA insurance. A condominium unit located in an unapproved project is just such a circumstance. In your case though, I would check again with the HOA to find out why they think it is too expensive and then maybe contact the company from the link above or do an internet search for any of the other companies who offer the same services and see if they believed your project would qualify (especially if you still have all the documents they need).