FHA Loan for a Condo | How Do You Know if a Condo is FHA Approved
How do you know if a condo is FHA approved? Searching for a FHA loan for a condo has more moving parts than a traditional home and FHA loan. FHA condo approval guidelines are not difficult with the HUD’s search tool and a Loan Originators help.
FHA Condominium Loan
The down payment for a FHA loan for a condo is the same as a regular FHA loan. 3.5% for 580 or higher FICO credit score and 10% for lower than 580 FICO credit score. FHA grants are available, with a minimum 620 FICO credit score, for 3% and 4% of the total loan amount to help with down payment and/or closing costs.
Some lenders have tougher guidelines than others. Getting pre-approved for a FHA loan for a condo starts with sending necessary documents required for underwriting and processing to a licensed Loan Originator. Once enough information has been collected, they will run the Automated Underwriting System (AUS) to determine a pre-approval purchase price and mortgage payment.
The difference between most traditional homes and a FHA condominium is that the mortgage payment will have home owner’s association dues (HOA). This is a factor when determining a maximum mortgage payment even though it is usually paid outside the mortgage and not escrowed.
FHA Condo Approval Guidelines
In order for a FHA condominium project to be FHA approved, the project must be in full compliance with applicable state laws, all other applicable laws, and regulations. Some ineligible projects include:
- Multi-dwelling unit condos
- Projects that are not residential
HUD’s search site makes it easy when asking the question, “How do you know if a condo project is FHA approved?” They make the process of looking for a FHA approved condo easy and not having to look through FHA condo approval guidelines.
How Do You Know if a Condo is FHA Approved
The condo search page allows anyone to look up condo projects by location, name, or status. Often, realtors or Loan Originators forget to check the status of the condo project. It is important to make sure each condo project is not only approved, but up to date. This will prevent any delays or disappointments during the underwriting process.