Understanding FHA Condos

Dated: September 13 2023

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               Understanding FHA-Approved Condos

In order to use FHA financing to buy a condo, the condominium project

must meet the eligibility requirements of the Federal Housing

Administration (FHA). FHA-insured loans offer some significant benefits for

the home buyer, such as lower down payment requirements and reduced

lender fees, and using this financing is a great way to purchase a condo.

The Federal Housing Administration establishes standards which must be

met in order to use FHA-insured loans. Once a Condominium project has

been assessed and approved, then home buyers can use this financial

product to buy their new home.

Benefits of Buying an FHA-Approved Condo

· Lower Down Payment – FHA loans offer the advantage of a lower

down payment compared to conventional loans. With a down payment as

low as 3.5%, first time home buyers have a lower entry point to home


· Lenient Qualification Criteria – FHA loans have more flexible

qualification rules, such as lower FICO scores and smaller reserve


· Larger Home Market – By including condos in the pool of potential

homes, buyers have more choice in properties.

Criteria for FHA Approval

To gain FHA approval, there are some essential requirements that must be

met. Here are a few of the most important.

· At least 50% of the units must be owner-occupied. This ensures that

the residents have a vested interest in maintaining the property.

· The FHA reviews the financials of the association to ensure it is

economically stable. This includes minimum reserves and proper budgeting

for maintenance and repairs.

· The condominium association must have appropriate insurance


· The FHA also reviews any past due association fees. This

demonstrates the financial responsibility of the owners in the project.

· FHA approval may also be denied if there is any pending litigation

that could affect the financial stability of the association.

An FHA-Approved condominium property allows potential home buyers

more choice when using FHA financing. For anyone interested in this

program, the first step is to work with a real estate professional or review

FHA-Approved properties online. FHA approval ensures that the buyer is

making a sound financial decision when buying their condo.

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MoveLiveLoveTx Team

With over 20 years of experience, the MoveLiveLoveTx Team was created to show that there is a difference in WHO you choose as a Realtor®. Peter and Vicky both moved to the Houston area in 1969 &am....

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