Will FHA Finance A Condominium?

By
Real Estate Broker/Owner with DDR Realty

With the current problems in the mortgage industry, an FHA Mortgage could be a viable alternate for buyers today. Including buyers who would like to purchase a condominium. Most agents are aware of the fact that the FHA will finance a 1 to 4 family dwelling. Well, FHA will also finance a condominium. The condo must be located in an FHA approved condominium project or development. The lender must be an approved FHA lender, such as a mortgage company, bank, or savings and loan association. Any creditworthy potential buyer who meets FHA underwriting criteria and will make the condominium unit their principal residence is eligible.


Even if the condominium project or development is not approved by FHA, a single condo unit in that project or development may still be financed with an FHA mortgage. In order to be eligible for an FHA mortgage, the approved FHA lender must certify that the condominium project or development satisfies the eligibility criteria set forth by HUD. The lender may use a suggested HUD checklist to determine if the project meets the requirements. The lender must perform a sufficient investigation in order to answer all the checklist items. If the single condo unit meets the criteria, the single condo unit would be eligible for FHA financing as a "spot loan" consideration.

FHA Approved Condo Search: https://entp.hud.gov/idapp/html/condlook.cfm

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Ambassador
1,654,850
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection
Derrick - You are always a source of useful information.  Condominium is a small part of my market put I suspect this too will change.
Aug 24, 2007 12:07 AM #1
Rainer
104,204
Rosario Lewis
DDR Realty - Newburgh, NY
GRI, SRES - DDR Realty - Orange County, NY
Thanks for the useful information
Aug 24, 2007 04:05 PM #2
Rainmaker
4,432,971
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thanks for a good post. I had a bad experience when I was new in the business. It was a condo and the night before settlement I received a call saying that the loan was denied because of investor ratio. The property was vacant, so the seller let the buyer move in there and rent for a month and I found a local bank that gave her the mortgage.

i have more experience and have even got spot approvals now.

Sep 04, 2007 06:34 AM #3
Rainer
41,968
John Klassen
M & T Bank - Kingston, NY
Good information. True, FHA has gotten much easier to deal with. Investor concentrations are critical in all condo projects.
Sep 10, 2007 06:57 AM #4
Rainer
37,637
Karl Burger
ERA Beach Ball Realty - Pensacola, FL
Pensacola Real Estate News
Thanks for the link I wish they would make it a little more user friendly. I know there are FHA approved condos in my area that are not listed. Good post.
Jan 05, 2008 09:17 AM #5
Rainmaker
120,370
DDR Realty
DDR Realty - Newburgh, NY
Orange County NY
Karl - You are welcome. Glad the post was helpful to you. As for the link, sorry, it is what it is.
Jan 05, 2008 09:22 AM #6
Rainmaker
224,127
Laurie Mindnich
Centennial, CO
Thanks- I vaguely recall the process of getting a condo project HUD approved in Denver (builder)- I really appreciate this info, because we may well be seeing a lot more in the way of FHA loans- I need to brush up!  Thanks.
Jan 08, 2008 12:12 PM #7
Rainmaker
120,370
DDR Realty
DDR Realty - Newburgh, NY
Orange County NY
Laurie - FHA is a viable source of financing especially for buyers who may have experienced some credit problems.
Jan 08, 2008 12:46 PM #8
Anonymous
Brian
How does a condo project get on the approved list?  We are involved with a few of them.
Feb 21, 2008 11:59 AM #9
Rainmaker
120,370
DDR Realty
DDR Realty - Newburgh, NY
Orange County NY

Brian - Contact HUD for Condo Approval Requirements. Here is the HUD link: http://www.hud.gov/ and Telephone number: (202) 708-1112

 

Feb 21, 2008 11:58 PM #10
Rainer
12,044
Hank Roeters
Platinum Partners Realtors - Darien, IL
Thanks for the information. I knew that they had approved condo's but didn't know about the "spot loans." I learn something new everyday on ActiveRain.
Feb 22, 2008 02:02 AM #11
Rainer
58,173
Don Draughn - Mortgage Professional
High Point, NC
Great information to share with anyone considering a Conco purchase.
Feb 22, 2008 02:25 AM #12
Rainmaker
120,370
DDR Realty
DDR Realty - Newburgh, NY
Orange County NY

Hank - You're welcome. AR does offer many benefits. Obtaining information is one of them.

Don - Thanks.

Feb 22, 2008 08:04 PM #13
Anonymous
Buyer's market ... if you can put down more than 25%

A reputable mortage broker here in Chicago cannot find me a home for my loan.  I have 15% to put down on a "first in" condo development (6 units that were apartments.. we're not talking something brand new, or something with more than 20 units..).   He says he can only find one person who would do the loan and that I'd need 25% down.  I don't have 85k.  This is 4 blocks from Wrigley Field in Chicago, an area where places are only selling for an average of 4% less than their list price.  What the heck.  Here's me, I am an engineer with an international firm, and have a credit score of 745.  If I can't buy who can? 

Oct 15, 2008 10:51 AM #14
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Rainmaker
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DDR Realty

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