FHA Loan Guidelines For Condos
by Greg from Orange County, CA USA
Question about FHA loan guidelines for condos: Hi Kate, We're looking at a condo community, but have suddenly been told that we cannot use an FHA loan to buy properties in this community.
Is there any way to know why this is? The community is about 10 years old and in very good shape.
About FHA Loan Guidelines For Condos
Dear Greg, Condominiums, regardless of the mortgage program generally have more requirements compared to single family detached housing. Part of the reason is that in addition to mortgage approval for the borrower and the home, the homeowners association also needs approving.
To finance with an FHA mortgage is complicated if characteristics of the homeowners association are not in line with FHA loan guidelines for condos. FHA will ask many questions such as how many units are owner occupied, rented or vacation homes, whether it was converted from apartments, or about the possibility of pending or on-going legal action.
I'd ask my mortgage lender what eliminated the condo specifically from FHA financing. A long shot but worth a little bit of time, I'd investigate reasonable explanations to objections that might help FHA understand the condominium in a different light.
Keep in mind that FHA loan guidelines for condos change over the years however sometimes if a condominium project is not approved with FHA, the lender can obtain a spot approval. This is an individual approval for one unit in the building. FHA spot approvals can be lengthy. Consider the timing of your mortgage interest rate lock
if you have already locked-in your mortgage rate.
If you decide to move on to another condominium project, check upfront before making an offer to see if the project has FHA approval.
I have provided links to more FHA home loan tips below for your convenience. After reading through the pages, please let me know if you have more questions.
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