I am purchasing a condo (or townhouse or PUD) and I have been told that I need project approval, what is it and who handles it?
Project approval is performed by the lender who will be funding your loan. The approval process usually involves a questionnaire (aka certification or warranty letter) being completed by either the development’s Homeowner’s Association (HOA) or the property management company. Often, the HOA or management company will require a nominal fee from a borrower or buyer to perform this service and will submit a bill to escrow. The questionnaire, once completed, is then returned to the lender for a compliance review. The lender will then ascertain whether the development’s legal and financial position meet their guidelines. In many cases, if the development is a sizeable one, the lender may have already lent within it and could have all necessary documentation for approval on site. The title company may also provide needed documentation for the lenders review, for example, the project’s budget, by-law’s and covenants, conditions and restrictions (CC & R’s). Some projects are on an approved li
Project approval is performed by the lender who will be funding your loan. The approval process usually involves a questionnaire (aka certification or warranty letter) being completed by either the development’s Homeowner’s Association (HOA) or the property management company. Often, the HOA or management company will require a nominal fee from a borrower or buyer to perform this service and will submit a bill to escrow. The questionnaire, once completed, is then returned to the lender for a compliance review. The lender will then ascertain whether the development’s legal and financial position meet their guidelines. In many cases, if the development is a sizeable one, the lender may have already lent within it and could have all necessary documentation for approval on site. The title company may also provide needed documentation for the lenders review, for example, the project’s budget, by-law’s and covenants, conditions and restrictions (CC & R’s).
