Buying a Condo with an FHA Loan


Filed under: FHA Loans


FHA announced about a week ago that things will be changing regarding the way loans are approved on condo purchases. This news is kind of a big deal for anyone who is dealing with condos out there, such as my Realtor friends or people looking to buy a condo.

Current Requirements for FHA Condo Loans

Historically speaking, if you have a client looking at condos and they are approved on an FHA loan, then we have no choice than to only look at the FHA approved condo list. If the HOA is approved, it’s a go. If it’s not on the list, then there are a few wacky ways to get around it… but it’s pretty difficult.

As a result, buyers are limited in their choices. If they want to use an FHA loan, then they need to focus on the condos that meet the guidelines and qualify for the list.

Changes Coming October 15th

Starting October 15th, FHA is going to start doing spot approvals. What that means is that we are not going to have to deal with this FHA approved condo list anymore. Condos that are not on the list will be able to get a spot approval.

This approval is based on all the normal stuff related to condos: there can’t be too many people in arrears on their HOA dues, there can’t be too much in the way of investment saturation within the project, and other factors that affect the risk of the loan.

It’s such big news for our FHA buyers. Now they are going to have the option to look at just about any condo out there, and in most cases be able to get the approval that is needed for the purchase.

We don’t have full details at this point. Once it rolls out, there will be more information to come. I’ll keep you updated when I know more. As always, I’m happy to answer your questions about mortgage approval. Contact me anytime for personal recommendations.


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