fhaloans.guide logo What are FHA-Approved Condominiums?

Housing Quality Standards Explained

FHA-Approved condos are condos that have been certified to meet the U.S. HUD's eligibility requirements for FHA Loans. In order to purchase a condominium using an FHA Loan, the property must already by on the approved condos list. The condominium's homeowners association, builder, developer, property manager, or mortgagee can apply to have a property added to the list.

Condos submitted by the home buyer, seller, real estate agent, or the borrower will typically be declined; however, all submissions are determined on a case-by-case basis.

Condominium managers often get their property FHA-approved to attract more buyers and increase the number of people who can qualify for a loan on the property. Home buyers like FHA Loans because of the low 3.5% down-payment and more relaxed credit score requirement compared to traditional loans. FHA Loans are very popular among first-time home-buyers in particular.

Looking for the complete list of FHA-approved condominiums? Use our powerful FHA-Approved Condominium Search Tool.

Approval Guidelines

Condos already on the FHA-approved list are certified to meet all the requirements below. For a property to be added or re-certified it generally must meet the following requirements:
  • Project must include 2 or more units
  • FHA concentration—the percentage of units financed with FHA Loans—must be below 50% (FHA Concentration may be higher in some cases due to fall-out or other HUD exceptions)
  • Less than 25% of property is used as commercial space
  • No more than 10% of properties can be owned by a single investor (Except for unsold units owned by the builder)
  • No more than 15% of homeowners can be more than 60 days delinquent on HOA fees
  • Property must meet state requirements for insurance coverage against flooding and other disasters.
  • Condominium's financials must be review and be above board
  • At least 50% of units must be owner-occupied
  • Meet the HUD Housing Quality Standards
The HUD can make exceptions in certain circumstances. Each FHA approval decisions are made on a case-by-case, as stated above.

Application Process

The FHA Condominium Submission process is fairly involved. A property should only be submitted by the condo's HOA, builder, developer, managing company, or authorized attorney. FHA condo approval last for 2 years. Condominiums may apply for re-certification 6 months before or after expiration. After 6 months passed expiration the project must apply again as a new listing.

Looking for the complete list of FHA-approved condominiums? Use our powerful FHA-Approved Condominium Search Tool.


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Source: https://fhaloans.guide/learn/what-are-fha-approved-condominiums