fha loan for condos
FDA-approved condos are condos that meet the US Department of Housing and Urban Development (HUD)’s property eligibility requirements. If you want to buy a condo using an FHA loan, the condo must meet these requirements and be included on the FHA condominium approval list. condo associations must apply to have their project added to the list.
FHA loans can be a good financing option for condominiums. Beyond the actual unit and building, FHA condo guidelines extend to geographic and environmental factors that could affect the property.
According to figures released by the FHA and HUD, a little over 80 percent of FHA loan applicants for condo loans have never owned property before. At the time of this writing, the FHA says there are over 150 thousand condominium projects in the U.S., but a small number (just over six percent) are approved for FHA home loans.
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While the FHA loan program is not limited to first-time buyers, that group accounts for the majority of condo purchases that are financed through the government-backed loan program. According to HUD data, 84% of FHA-insured condominium buyers have never owned a home before.
Fast Fact: When the bubble burst, FHA dramatically cut condo loans. But condos play an essential role for first-time buyers, creating a ripple.
Not only do the rules for a condo loan vary greatly between FHA loans and conventional loans, but also each lender’s investor may have her own set of rules (called overlays). Unlike a single-family home loan, condo loans are different, and not every condominium project qualifies.
Consider the types of 30-year loans and the condo’s qualifications before selecting a loan program. A 30-year mortgage benefits borrowers who are more concerned with obtaining a certain monthly.
Want to get a reverse mortgage on a condo? Learn how to get your condo association approved by the FHA, if it's not already.
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It’s much less complicated than one for a condo, he says. "When getting a loan for a condo, you have to go through a process of qualifying as a borrower and also making sure the condo is approved," Trungale says. For instance, a condo must meet FHA approval if you are going for an FHA loan.