If you’re among those looking forward to buying a condo using an FHA loan, there’s one crucial aspect you should be aware of: the location must meet a few requirements and be included on the FHA Condominium Approval List. Basically, condo associations must apply to have their project added on the list, first thing first.
What’s an FHA approved condo?
Such locations are basically residential condominiums that meet all the property eligibility requirements and are, of course, available for purchasing the above-mentioned loan. The Federal Housing Administration insures one unit condos in which you can get either a 15 year or a 30 years fixed-rate mortgage.
Generally speaking, any condo can be bought using many different types of home loans, even conventional loans. However, if you want to get one through an FHA loan, the property must be approved by the Administration.
Which are the eligible projects?
There are a few types of condo projects the United States Department of Housing and Urban Developments considers eligible, as it follows:
- Detached or semi-detached units
- Manufactured housing
- Row house
- Walk up, mid or high-rise
- With or without an elevator
- Anything that contains at least two units
Where should I check if a project is approved?
Let’s just say that you found the ideal condo complex and you’re fancying buying one.
In order to see if the condo is FHA approved, you should start with checking the master list of FHA-approved condo projects, available here.
What are the main general approval guidelines?
The main condition for a condo to be FHA approved is that it should consist of two or more units. Also, no more than 25 percent of the project’s total floor area can be used for non-residential/commercial use, while no more than 10 percent of the units can be owned by one investor. Finally, no more than 15 percent of all units’ homeowners association fees can be 60 or more days late.