FHA Condo Loans
FHA condo loans: To see if a condo is FHA approved go to: FHA Condo Lookup Tool.
There are no more FHA “spot approvals.” Either a condo is on the FHA approved list, or you can work with a lender that can get it FHA approved. Getting an FHA approval can cost a lot of time and some money. FHA is a great loan because it allows for a lesser owner occupancy level (51% or higher is all that is required) on a high loan-to-value loan. If you take a listing in a condo it may be worth approaching the board to see if they’ll spend the time and money to get an FHA approval and spread the cost out amongst the unit owners, which makes the building more marketable for all. The costs are in the low thousands, not much when spread out over multiple unit owners.
Investor level: Investor level (the # of units owned by investors who rent them out) is important, and should be the very first question you ask when listing or showing a condo. This will determine whether you think you can offer buyers FHA financing or not.
Another thing to look out for if you want to get a condo FHA approved is to make sure you or a lender ask a lot of questions about the condo, in advance of accepting or writing offers, such as:
- Investor level. (Hopefully it’s 51% or higher to get an FHA loan.)
- How many units are owned by one investor? (Should be no more than 10% of all units.)
- Is the condo undergoing any litigation? (Answer needs to be no.)
- Are any unit owners behind on dues, if so, how many? (Hopefully no more than 15%.)
- How long has the HOA been turned over to the unit owners?
For VA condo loans: To see if a condo is VA approved go to: VA Condo Lookup Tool.