A variety of scoring
systems impact the housing market, particularly FICO scores
that provide an assessment of a home buyer’s credit and can
make the difference between a mortgage loan approval or
denial and influence the mortgage rate offered to borrowers.
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Buyers may also be
familiar with Walk Score, which measures the walkability of
a neighborhood, Bike Score, which provides insight into how
easy it is to get around on two wheels, and Transit Score,
which assesses access to public transportation.
Now a new score, labeled “FiPHO,” has been introduced to
help buyers and homeowners evaluate a condominium, co-op or
homeowner’s association. FiPHO, which stands for Financial,
Physical and Operational health, is a score from one to 100
that provides a snapshot of the association and its work.
The higher the score, the stronger the association.
The score, developed by Association Reserves, an
organization established in 1986 that has provided more than
70,000 reserve studies for associations, is part of a new
database called Association Insights & Marketplace (AIM).
The database has identified more than 400,000 associations.
Boards of directors of these associations can upload
financial, physical and operational details of their
associations to generate a FiPHO score. The financial health
score is based on a review of documents to evaluate whether
the finances of the association are sound. Additional
records are required to generate a physical health score
that reflects how well-maintained the community is, and an
operational health score, which focuses on whether the
association is running smoothly.
The board of directors of an association must complete their
profile on the AIM site (for no charge) to have a FiPHO
score generated. Ideally, associations will want to be
transparent with owners and potential buyers. While the
FiPHO score and AIM reports are free until Labor Day,
eventually buyers must pay $49.99 for an in-depth report.
The cost of the report is income for the Board of Directors,
which is an incentive for associations to participate. |
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A new score, called “FiPHO,” has been introduced to
help buyers and homeowners evaluate a condominium, co-op or
homeowner’s association. FiPHO, which stands for Financial, Physical
and Operational health, is a score from one to 100 that provides a
snapshot of the association and its work. The higher the score, the
stronger the association.
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Buyers in condo, co-op
and homeowner associations must be provided with association
documents for free after their purchase offer is accepted.
However, some buyers may want to review documents and
discuss them with their lender, real estate agent and
attorney before making an offer.
The idea for the FiPHO score started with
the collapse of the Champlain Towers South condo in
Surfside, Fla., in 2021, which brought to light the
potential danger of condo associations that mismanaged funds
and delayed maintenance.
“Last year’s tragic collapse of Champlain Towers South
Condominium in Surfside, Florida is the most extreme example
of what can happen when deferred maintenance is combined
with an underfunded reserve account, and the Board of
Directors and Owners are working at cross purposes,” Robert
Nordlund, AIM’s co-founder and the founder and CEO of
Association Reserves, said in a statement.
