FHA loans allow home buyers to purchase homes with slightly lower credit scores and less money down. They are very popular with low to moderate income households and first time home buyers. If you have a credit score of at least 580, you may be eligible for an FHA loan and 3.5% down.* -Investopedia I believe one can also have a lower credit score as long as they put more money down.
However, buyers often can't get FHA financing on condo complexes. FHA has requirements on ratios of primary occupants to rentals in a complex and this may disqualify some complexes. HOAs are also required to be FHA certified with certain requirements that HOAs may not want to abide by.
Although in many cases, condos are the perfect vehicle for first time home buyers as a starting point for home ownership as they are more affordable than homes, FHA and sometimes the HOAs make it difficult to get FHA financing. This has the unfortunate and ironic result of reducing the number of primary occupants in a complex and perpetuating the increase in rentals.
The average age of the first time home buyer in the US is 36, it's the oldest since NAR started collecting this data in 1981 (NAR Economist Outlook Aug 2nd, 2023) In order to become a home owner, the typical pattern is to buy something, build up some equity, perhaps buy something bigger. One of the pathways to allow this to happen is blocked and it's unhealthy for potential condo buyers as well as condo complexes as they tend to get too many rentals with high turnover and degradation of the property over time. I believe FHA needs to look at this.
*Pictured Shadow Mountain Condo, Tulsa OK listed at $139,000 2bed, 2 1/2 bath, photo by Linda Monforten.
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