Find! FHA Experts

FHA Home Loan Information
Apply for a FHA Loan
FHA Mortgage Rates
What is an FHA Loan
FHA vs. Conventional
FHA loan limits
FHA Mortgage Insurance
Required Documentation
FHA Closing Costs
Purchase vs. Refinance
FHA Streamline Refinance
FHA Refinance Loan
FHA Cash Out Refinance
FHA Hybrid Arm's
Hope 4 Homeowners H4H
FHA Jumbo Loan Program
Reverse Mortgages
FHA Secure Program
203-K Rehab Loans
203-K Streamline Loans
Find a 203-k Consultant
FHA Kiddie Condo's
Officer next door
Teacher next door
MIP Refund explanation
FHA HUD homes
Home Buying Guides
Message Boards
FHA/VA Blog
 
Get the answers to all your 'bottom line' questions on our Mortgage Calculators Page.
Website Awards
Business Links
Link Exchange
FHA Mortgage Leads
About Us
Privacy Policy
Equal Housing Opportunity.
Equal Housing Opportunity Logo 

 

  www.FHAinfo.com 
2692 Madison Rd. Suite N1 #249, Cincinnati, OH 45208 ---  Contact Us

Copyright © FHA Info 2001-2012
All Right Reserved

 

         Buying a Condo using an FHA Loan          

HUD Section 234(c) of the National Housing Act provides authority to insure any mortgage covering a one-family unit in a project coupled with an undivided interest in the common areas and facilities which serve the project. The project may include dwelling units in detached, semidetached, row, garden-type, low- or high-rise structures.  Generally these types of properties are referred to as Condominiums.

HUD will insures mortgagees against losses on mortgage loans used for buying a condo or to refinance individual units in eligible condominium projects provided that they meet certain guidelines.

A. Project Eligibility. The condominium project must be on HUD's approved condominium list.
B. Applicant Eligibility. Eighty percent of the HUD-insured mortgages in a condominium project must be the principal residence of the owners (owner-occupants).
C. Maximum Insurable Mortgage: Same as Section 203(b) (except that the mortgage amount must be in multiples of $50).
D. Minimum Investment: Same as Section 203(b).
E. Mortgage Term: Same as Section 203(b).
F. Mortgage Insurance Premium: Monthly+Upfront MI of 1.5%
G. Refinancing: Same as Section 203(b).

If the Condominium is not approved then the Lender may go through the "Spot Approval" process.

The following requirements must be satisfied before a spot loan is endorsed:

The condominium project must be complete. There should be no ongoing or anticipated addition of any units, common elements, and/or facilities.
Control of the common areas of the project must have been turned over to the unit owners association for at least one year.
The owners association must provide evidence that the project has the appropriate hazard, liability and flood insurance.
Individual units in the project must be owned in fee simple or be an eligible leasehold interest. The project's legal documents must provide for undivided ownership of common areas by unit owners. By virtue of this ownership, unit owners must have the right to use all facilities and unrestricted common elements.
The project's documents should not place any legal restrictions on conveyance. Any provisions that seek to limit the free transferability of title is generally unacceptable. Such restrictions include rights of first refusal and restrictive covenants. Certain governmental or nonprofit programs designed to assist in the purchase or rental of low- or moderate-income housing are exempted from the restrictions on conveyance provisions.
At least 90% of the units in the project must have been sold.
At least 51% of the units in the project must be owner-occupied.
No single entity may own more than 10% of the units in a project. "Entity" includes an individual partnership, corporation, limited liability company, limited liability partnership, joint venture, investor group or other natural or legal person qualified to hold an interest in real property. The 10% restriction does not apply when the ownership of less than three units would disqualify an otherwise eligible project.
HUD recognized that the 10% cap on the number of units that may secure FHA insured mortgages in a given project can place a small regime at a disadvantage, since only a few units will invoke the limit. Accordingly, a two-tiered system was established. For condominium projects having more than 30 units, no more than 10% of the units may have FHA insured loans at any given time. Condominium projects consisting of 30 units or less, can have up to 20% of the units encumbered by FHA insured mortgages under the spot loan rule.

Click on the title to learn more about that program:

Standard fixed rate (FHA 203b)

Rehab Loan (FHA 203k)

Condominium Loans (FHA 234c)

FHA adjustable rate mortgage (FHA 251)

FHA Hybrid Adjustable Rate Loans

FHA 2-1 buydown (FHA 203b, Not Allowed on FHA 251)

Energy Efficient Mortgages Program

Reverse Mortgages for Seniors

 

 

How to Qualify
Understanding fha loan credit guidelines
Credit Guidelines
fha loan income guidelinesIncome Guidelines
overcome credit problems to get approved for a fha loanOvercoming Credit Problems
FHA loan case studies


Case Studies

FHA loan underwriting


What are compensating factors ?

How much money do you need for a fha home loan

How much money do I need?

Where can you get Free down payment moneyWhere to get down payment money