FHA Spot Condo Approvals

Mortgage and Lending with Independent

(Spot The Target Dog)


FHA-approved condominium projects

When buying a Condo that requires FHA financing, the condo must meet certain strict requirements in qualifying for the Government Based FHA loan product.

The Standard Rule is that the Condominium Project must adhere to at least having 51% of the owners being owner-occupied in order to qualify for FHA financing.

Now if the Condo Project is just being built and has many stages of being built in the future then you can exception in Stage Development that requires case by case approval.



Condos that are not approved

So what happens to the Condos that are not approved, can you still get FHA financing for them?

Just because the condo project is not on the approved list does not mean they are never to be approved.  Verify with the Condo Association to see if 1st they have over 51% owner-occupied then have the lender put in the necessary paperwork to get approved.

Be aware this process may take up to 6 months!!


FHA Spot Condo Approvals

So what if there is a condo project with less than 30 units?

I just had a client looking to buy a condo with only 5 units in the association.  We could still do the FHA financing if there is at least 20% of the owners who have an FHA financing already.

This approval process is considered Spot FHA Condo Approval.

It is really cool because we only needed 1 owner with a FHA loan and we didn't need to submit the paperwork to get this association approved because there is less than 30 units in this Association.



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Fred Chamberlin
Guild Mortgage Co - Oak Harbor WA - Oak Harbor, WA
Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant

Good information about condos Justin. I appreciate seeing good information disseminated.

Nov 08, 2008 05:45 AM #1
Justin Williams
Independent - Virginia Beach, VA
Loan Officer

@ Fred - Hi there thanks for stopping by and commenting, much appreciated!  Hope your having a great weekend!

Nov 08, 2008 06:12 AM #2
Yvette Smith
LONG & FOSTER - Williamsburg, VA
Realtor In Williamsburg VA, Homes for Sale


I ran into that problem & they couldn't buy because the percentage was more than 51%.  That Spot Approval is cool if you run into a really small association.  Wonderfully explained, as usual!

Nov 08, 2008 10:28 AM #3
Rick Tourgee
Robert Paul Properties, Inc. - Provincetown, MA
Provincetown and Cape Cod

Justin- Very good post!  We are not able to use FHA up here in Provincetown on Cape Cod since most Buyers are buying the property as a second home and most condo associations are very small with less than 5 units.  On top of that, the other units are probably not FHA mortgages.

Nov 09, 2008 02:38 AM #4
Tina Merritt
Nest Realty - Blacksburg, VA
Virginia Real Estate

Justin!  As usual, great information on the FHA program.  It's so important to know the percentages and whether or not the complex can qualify.  I wonder how many agents have just "assumed" a complex was not approved and wound up doing their sellers a huge injustice?

Tina in Virginia

Nov 10, 2008 11:51 AM #5
Military Relocation Specialists
Long and Foster Realtors - Virginia Beach, VA

good info. to share.  As a site agent on a condo site that is not FHA approved, I can't tell you how many offers I have received with buyers who were using FHA financing!  

Nov 13, 2008 07:55 AM #6
Glenn Rollo

I am trying a spot approval throgh wells fargo. THis association is very strong. The only stumbling block is that they do not acrry a sepeate maintenence reserve. Is this always a deal killer for a condo spot approval or will they ask about current arrears of owners?


Mar 30, 2009 08:15 AM #7

I live in a duplex in NJ but it is considered a 2 unit condo association between me and my neighbour. Could I somehow do spot approval to get it refinanced through FHA? Please email me at jalajdesai@yahoo.com . Could you help me getting the loan? Thanks

Jun 10, 2009 12:04 PM #8
Elizabeth Helton
RE/MAX of Orange Beach - Orange Beach, AL

Can you define owner occupied? Full time occupancy? 2 weeks + out of year owner occupied? Thanks!

Jun 11, 2009 03:47 PM #9

Hey!  I heard that fha is most likely going to allow first rite of refusal by october. Is this true? Do you think there is a chance it could be done sooner?? ;)



Jul 15, 2009 04:34 AM #10
Philip Turner
Mortgage Banker Since 1980

It looks like the Spot Approval process will now stop on December 1st, 2009.

Oct 17, 2009 10:23 PM #11
Katherine Montrose
Long & Foster REALTORS - Chesterfield, VA

How can I find out if there are any FHA mortgages within the condos?



Jan 13, 2010 10:47 PM #12
ReadySetLoan Condo Approval Team
ReadySetLoan Condo Team LLC - South Windsor, CT
The FHA/VA Condo Project Approval Specialists

Just wanted to shoot you an update that the Spot Approvals are no longer acceptable to FHA.  If the complex is not approved, FHA financing is not available.  In addition, the USDA RD loan program uses the FHA approved condo list so this financing wouldn't be available either.

All complexes will have to be recertified through HUD every two years so complexes that were approved prior to October 1, 2008, will have to be recertified by December 7, 2010.

I can help with the approval process if you know of a complex that is not approved but can be.  All complexes should take advantage of the lenient temporary guidelines that HUD has in place for 2010 because it will be harder to get approved next year.

Eric Boucher



Feb 09, 2010 04:34 AM #13
Nadine Cook

If the condo community is not on the approved FHA list, is there any way of obtaining an FHA spot check post the new regualtions? If so, please advise. thanks. 

Sep 05, 2010 05:55 AM #14

hey whats up yo?:D

Nov 17, 2010 08:24 AM #15
Kevin Li

target is way better then Walmart and they have lower prices too!!! GO SPOT!!!

Apr 19, 2012 10:59 PM #16
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