Did You Know…
October 10th, 2011
FHA Backtraks on Fidelity Bonds
FHA released guidelines in June that included a mandate that professionally managed condominium associations compel their management companies to carry fidelity bonds in amounts equal to the associations’ budget and reserves. In addition, all condominium associations would be required to carry fidelity insurance to cover board members and association employees.
FHA representatives indicated in September that the agency would back off its requirement that management companies carry fidelity bonds. Instead, the FHA will allow associations to obtain policies that cover their management companies. FHA’s reversal will save management companies and homeowners money and allow more condominium associations to meet FHA mortgage requirements.