FHA Condo Approval Requirements

Here are the latest FHA condo approval requirements for having a condo complex FHA approved.  As I’ve stated in the past, having a condo complex FHA approved is very important for sales within the neighborhood and property values.

FHA Project Eligibility Requirements for Attached Condos:

  • no more than 10% of units owned by one entity
  • no more than 15% of the units can be 30 days or more delinquent on assessments at time of review
  • at least 50% of the total units must be sold prior to endorsement of a mortgage on any unit
    • for new construction, pre-sale requirements are reduced to 30% temporarily
  • at least 50% of the units must be owner occupied
    • vacant or tenant-occupied REO units, may be excluded from calculation of the required owner-occupancy percentage

FHA Loan Concentration:

  • normally 30% but temporarily increase to 50%
  • can be increased to 100% if:
    • project is 100% complete and has been complete for at least one year
    • 100% of units are sold and no entity owns more than 10% of the unit in project
    • project’s budget provides for funding of replacement reserves for capital expenditures and deferred maintenance in at least 10% of budget
    • HOA is control by owners
    • owner occupancy ratio is at least 50%

HOA Budget Requirements:

  • budget must have reserve funding equaling at least 10% of total income of the project
  • adequate funding for insurance coverage and deductibles
  • sufficient to maintain and preserve all amenities and features of the project

Insurance Requirements:

  • Homeowner Association must carry master blanket policy equal to 100% replacement cost
  • comprehensive liability insurance
  • fidelity bond/fidelity insurance
  • flood insurance if needed
  • not subject to litigation

Recent Articles of Interest:
FHA Condo Recertification List
FHA Extends Expiration Dates for Condo Project ApprovalShanna Lafontaine is a Realtor with RE/MAX Affiliates who works Metro Columbus, Dublin, Hilliard, Powell, Worthington, Westerville, Delaware and surrounding Central Ohio areas helping both Buyers and Sellers.

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Shanna Lafontaine, LLCĀ© 
RE/MAX Affiliates Inc. 7239 Sawmill Rd. Ste 210, Dublin, OH 43016

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