How to Get a Condo With an FHA Loan

Will the FHA finance condominiums?

FHA approved condominiumsIf you are seeking an FHA loan for a condominium, you must verify that the condominium project has been “approved” by the FHA. HUD/FHA offers an intuitive condominium lookup that lists all FHA-approved condominium developments located across the United States and qualifying territories.

If the condominium complex is not on the approved list, you and your lender must follow the FHA approval process.

There are two ways to acquire approval: either for the whole condo complex or on a case-by-case basis.

On 10/15/2019 HUD officially launched the Single Unit Approval procedure.

Borrowers may now obtain FHA approval for single-family units in non-FHA-approved condominium developments.

FHA Approval Requirements for Condos

To be approved by the FHA, a condominium complex must adhere to the following FHA requirements:

  1. At least 85% of the condominium units must be current on their condominium dues.
  2. Commercial use is permitted on no more than 35% of the site.
  3. Condominium developments that are still in the construction phase will be ineligible.
  4. Every three years, the condominium project must be recertified to verify that it continues to fulfill all applicable standards.
  5. FHA insurance is available for up to 10% of units in condominium complexes with at least ten units.
  6. FHA loans are available for just two units in condominium structures with less than ten units.
  7. Hazard, flood, liability, and other insurance needed by state law and HUD must be carried on the property and units.
  8. No more than 10% of the total units can be owned by one investor
  9. No more than 15% of units may be 60+ days behind on HOA dues.
  10. No more than 50% of apartments may be held by investors or rented.
  11. The condo must be adequately insured and have a cash reserve equal to at least 10% of the HOA budget.
  12. The property must be finished in its entirety.

Your lender requests the single unit approval

The FHA questionnaire (Form HUD-9991) is normally sent to the condominium's homeowners association (HOA) or management company by your lender. A representative from one of these companies must complete the condominium questionnaire, which will then be submitted to the FHA by your lender.


In conclusion, an FHA loan may be the best option for you when purchasing a condo. They are known for their low interest rates and relaxed credit requirements. If you are interested in learning more about FHA loans or would like to apply, contact your local lender today.