🏢 What Is an FHA-Approved Condo?
An FHA-approved condo is a condominium development that meets the Federal Housing Administration’s (FHA) criteria, allowing buyers to finance their purchase with an FHA loan. Approval ensures the project meets specific safety, financial, and structural standards.
✅ Core Approval Requirements
Project Completion
The condo development must be complete or at least have the current construction phase finished.
Minimum Unit Threshold
Projects with 10+ units: Max 50% of units can be FHA-insured.
Projects with fewer than 10 units: Only 2 units can be FHA-insured.
Owner-Occupancy Rate
At least 50% of the units must be owner-occupied.
Condo Association Financial Health
Must hold at least 10% of their budget in cash reserves.
85% of HOA dues must be collected on time (exceptions possible with a valid reserve study).
Commercial Space Limit
No more than 35% of the property can be used for commercial purposes.
Recertification Requirement
FHA approval must be recertified every 3 years.
🔍 Additional HUD Considerations
Projects must comply with HUD's Single-Family Housing Policy Handbook (4000.1).
Includes standards for insurance coverage, clear title, legal compliance, financial reserves, and structural soundness.
Single-Unit Approval (Spot Approval) may be available in non-approved projects (if they have at least 5 units).
📅 FHA Approval Process Overview
Who can apply? Condo associations (for full project approval) or individual buyers (for single-unit approval).
How long does it take? FHA reviews usually take 2 to 4 weeks, sometimes including an inspection of the unit and shared areas.
📂 Quick Snapshot
Requirement | What It Means |
Completed Project | Construction must be finished |
|
Unit Count | ≥10 units: max 50% FHA; <10 units: max 2 FHA loans |
Owner-Occupancy | Minimum 50% must live in their units |
HOA Financials | 10% reserve fund; 85% dues current |
Commercial Usage | Cannot exceed 35% of total property |
Recertification | Must renew FHA approval every 3 years |
💡 Bottom Line
FHA-approved condos make financing more accessible through FHA loans. If a development isn't already approved, you can still apply for Single-Unit Approval, though it requires more documentation. Checking FHA approval status early can streamline your home buying process.
FHA Approved Condo Lookup: https://entp.hud.gov/idapp/html/condlook.cfm
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