Buying a condo is an affordable way to enter the door to homeownership. FHA has loans for people who are looking to buy condos, however not all condos are approved for FHA financing. Here are some ways to find a condo that is approved under FHA financing, so you can get the benefits of owning a condo under a FHA loan.
HUD or the US Department of Housing and Urban Development has made a list of the of condominium complexes that are approved or not approved for FHA financing. There are certain standards that were set forth but HUD that determine if a condo is FHA approved or not. If a property you are looking at is on the list, you should have not problems purchasing with an FHA loan.
HUD has made a list of the basic requirements that a condominium complex needs to attain in order to be considered approved for FHA financing, here are some of the basic requirements:
- The complex must be at least 50% owner occupied. In other words, if there are 200 units in the complex, at least 100 of them need to be owned by the person who resides there. No more than 50 can be owned by a landlord and rented out.
- A maximum of 15% of the owners can be more than 60 days late on homeowner dues (rent).
- There can be no pending litigation against the condo. No one is trying to sue the complex, and the complex is not trying to sue anyone.
- The condo complex must maintain minimum insurance requirements so that the building is not destroyed by fire or other calamities without insurance.
- The condo complex must be approved by FHA. This requires an extensive application that is approved by FHA.
If you are looking into purchasing a condo it is important that you visit FHA’s website to ensure that you condo is on the currently approved list. You can search by the name of your condo, or by ZIP code. If you can’t find your condo on the first search it may be named something different than you know it as.
If you have found the condo you are interested in purchasing on HUD’s list than be sure that it states this complex as approved on your list. There are time where condos are under review on the list or they were rejected acceptance for FHA loans. HUD’s approval also has a time span of two years. Be sure that your condos approval has not expired. Sometimes the renewal process can be a little time consuming for the complex. If you cannot find your condo on the list at all it has been rejected or the approval has expired.