I'm SUArta Back! The New FHA Spot Condo Approval

Mortgage and Lending with US Bank NMLS: 22343

 I'm SUArta Back!  The FHA Spot Condo Approval


Mortgage lenders that see a fair amount of FHA loans have, for the last few years, lamented the loss of the condominium "spot" approval.  This erstwhile shortcut would allow a single unit of a condo project to be eligible for an FHA loan even where the entire project might otherwise not pass muster.  And for FHA, it's been widely recognized since the sunsetting of the spot approval that buyers whose search requires an FHA loan and a price range that might only include condos, had real challenges ahead.  Specifically, their target inventory would need to be confined only to existing FHA-approved projects, which can be found on the FHA approved condo list.


However, as of 10/15/2019, the Federal Housing Administration has reinstated a version of the spot approval. As one would expect with such news, there are misconceptions about how it will be implemented.  The main ones stem from announcements suggesting a tremendous anticipated increase in FHA condo approvals as a result of the new FHA spot approval process.   While there will undoubtedly be an increase in FHA condo lending, it will mainly be because the new process allows lenders that were not previously authorized or willing to assume the risk of full project approvals to do SINGLE UNIT APPROVALS (SUA) in projects that are not currently FHA approved.

However, this new SUA/SPOT program is not a streamlined review process and it is not similar to Fannie Mae's  “Limited Review” or Freddie Mac's “Streamlined Review” on the conventional side.  SUA documentation requirements are similar to FHA full project approval criteria, and obtaining documentation for full FHA project approval can take anywhere from 30 to 90 days. Guaranteed Rate will be providing SUA (Spot) Approval within 24 HOURS from receipt of ALL of the required documents, but the time and effort needed to collect the required documentation remains the same.  Another misconception is that it will somehow be easier for projects to qualify for SUA (SPOT). In actuality, it is the opposite, as there are items that are more stringent for SUA/SPOT approval than full project approval.

That said, we here at Guaranteed Rate still see this as a great thing for our buyers and our industry.  For instance, there will undoubtedly be condo loans originated on projects that do NOT qualify for SUA (examples: FHA concentration within the project or single entity ownership exceeds SUA thresholds). In these cases, we're capable and staffed to handle full FHA (HRAP or DELRAP) approvals, adding additional value to condo agents, buyers, owners, and sellers.  Get in touch any time if you feel these are services that can help you today.


I'll be back, 



Robert J. Spinosa
Vice President of Mortgage Lending

Guaranteed Rate
NMLS: 22343 
Cell/Text: 415-367-5959 


Marin Office:  324 Sir Francis Drake Blvd., San Anselmo, CA  94960

Berkeley Office:  1400 Shattuck Ave., Suite 1, Berkeley, CA  94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate.  In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate's Human Resources Department.


Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood ChicagoIL 60613 - (866) 934-7283

Comments (5)

Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

Do they keep the list updated?  I seem to recall when I would check the list it was dated and not always accurate.

Nov 05, 2019 07:28 AM
Nick Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Selling the Main Line & Chester County

Many condo associations let their approval drop as the requirements were so onerous. We have a couple here that allowed themselves to drop out although agents kept encouraging them to keep themselves on the approval list. Hopefully, the new process may make homes in here available for FHA buyers once again.

Nov 05, 2019 08:48 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Rob the return of the FHA Spot Approval for condo's was needed and welcomed in my area.  I don't think FHA is opening it up enough, but it is a start for now.

Nov 05, 2019 09:46 AM
Rob Spinosa

Totally agree, George Souto

Nov 06, 2019 06:24 AM


Nov 15, 2019 08:32 AM


Nov 15, 2019 08:32 AM