With all the press FHA loans has garnered recently we have received quite a bit of inquiry on this government insured mortgage. We have been able to qualify most who have contacted us, however, we’ve had to disappoint a few. The crazy thing is the reason for denial wasn’t even something related to the borrower. It was entirely based on the property they were seeking to mortgage. While there are relatively few property related hurdles for single family homes, when it comes to condominiums and FHA it’s a different story entirely.
Basically, it boils down to the condo itself being FHA approved. So, if you are thinking of purchasing a condo or refinancing a mortgage on a condo, and would like to use the FHA loan program, the first thing you need to do is make sure it is FHA approved. The loan goes nowhere if the condo in question is not on the FHA approved list. To help you the HUD maintains a master list on its website, but to be double sure, I suggest contacting a FHA approved lender.
If you are curious about what qualifies a condo for FHA approval, the Mortgage Porter has written a fantastic post on this topic. Here are some of the requirements she highlights from the FHA guideline:
1. At least 51% of the total units in the project must be owner occupied.
2. At least 90% of the total units in the project have been sold.
3. No single entity owns more than 10% of the total units in the project.
4. The project, including common areas, is complete with no special assessments and no legal actions pending.
5. The owners association has a reserve plan and a reserve fund , separate from the operating account that is adequate to prevent deferred maintenance
Feel free to contact me if you have a particular property in mind and want to find out if it is FHA approved.
FHA 203(k) Financing/Rehabilitation Loans
FHA and New Construction
FHA: Some Facts and Tidbits
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on May 12th, 2008 at 2:22 pm
Great info.. Thanks! The “90% of the total units in the project have been sold” criteria hurts most of the guys that were too late to the condo conversion craze. I believe the owner occupancy requirements use to be much higher. If you don’t mind, I’ll give you a call this week to check on a complex in Dobson Ranch.
on May 13th, 2008 at 10:35 am
Nick – sounds good. You can call either me or Aimee.
Thanks,
on May 27th, 2008 at 7:38 pm
I would like to know if the Casa de Amigos Condomimiun Development in Scottsdale, AZ 85257 can be approved for an FHA AmeriDream program? I know the requirements for the FHA approval but how can I find out what is denying this complex the approval? Thank you….Wayne
on May 31st, 2008 at 10:58 am
Great info on fha Condos
on Aug 11th, 2008 at 10:11 pm
How can you get a NEW condo (not conversion) subdivision FHA and Ameridream or Nehemiah approved. There aren’t any sales yet, but some buyers want FHA and dn. payment assisted loans. Where would I go to get paperwork and an explanation of requirements needed?
on Oct 30th, 2008 at 3:36 pm
I have a property address that I’d like to know if it’s FHA approved. Can you help me with that plz?
on Jan 15th, 2009 at 5:29 am
[...] a few more details on the approval criteria, you can read Your Condo Needs to be FHA Approved or FHA Spot Approvals. addthis_url = [...]
on Apr 29th, 2009 at 5:07 pm
FHA is no good. For low-income ares that need it, it would be suitable.
But if the complex is nice or plans on being nice, FHA is a bad route to take. If the candidates can’t quality for a regular mortgage, good luck collecting HOA dues cause FHA has a very high level of default.
on May 5th, 2009 at 4:40 pm
I have a consulting company based in Chicago designated specifically for FHA/VA condominium approval. My success rate is at 100% and I see that some of the information listed above as far as the 90% presale requirement can be updated. The presale requirment is 51% for new, existing and conversions. I know that Chapter 11 states 90% yet the technical underwriter has the discretion to reduce it to 51% which has been the case for ALL of my approvals. Feel free to visit my site, http://www.jaemac.com and ask any question relating to FHA/VA approval on the Contact Us page. The approved developments page is just a snap shot of what I have done, I have about 20 more projects to add from this year alone.
on Oct 26th, 2009 at 6:03 pm
Our consulting company, Condo Approval Professionals LLC, has over 15 years of national project approval experience. We can help you with your project approval needs. Visit us on the web at http://www.condo-approval.com for more information.
on Oct 31st, 2009 at 1:39 pm
I built a brand new 2 unit condo buiding for sale in washingto DC, Is there any way I get FHA financing without going thru the approval process which is lengthy and time consuming?
THANKS
on Nov 4th, 2009 at 5:21 am
Good morning, Tufail-
Right now, HUD does not allow a 2 or 3 unit buildings to obtain FHA condo approval. There are new guideline changes in mortgagee letter 09-19 which indicate that 2 and 3 unit buildings will become eligible as of October 1, 2009 yet that has been delayed to November 2, 2009 and yet again to December 7, 2009. I just finished getting a project approved in D.C. a couple of weeks ago so when the time comes, I’d be happy to walk you through our process and save you the time consuming process.
on Nov 4th, 2009 at 6:06 am
When the new FHA condo guidelines take effect on 12/7 they will begin to accept 2 and 3 unit condo projects. Unfortunately, the project will need to be submitted to FHA for their review and acceptance. I would be happy to discuss with you how we can get your condo approved. I have over 15 years of national condo project approval experience. You can reach me at steve@condo-approval.com. Visit my website http://www.condo-approval.com for more information.
on Nov 4th, 2009 at 8:01 am
Hi Tufail,
FHA will not consider a 2-unit condo until their new guidelines take effect on 12/7. I would love to talk to you about working together to obtain FHA approval for your condo. You can contact me at steve@condo-approval.com. Also, visit our website, http://www.condo-approval.com, for more information about us and the services we provide.