FHA Condominium Loan
Condominium ownership is a non-conventional form of homeowning that is becoming more and more popular. Condominiums, or condos, are developments in which separate owners of individual units mutually own the common areas and facilities (such as pools and clubhouses). In an effort to encourage more Americans to take part in the housing market, the FHA insures condominium loans under Section 234(c) and encourages lenders to finance these purchases. Having these loans backed by the FHA is very important for low- and moderate-income renters who wish to avoid the risk of being displaced when their apartments are converted into condominiums.
Property Eligibility
Under the Section 234(c) program, the FHA insures a 30-year loan to purchase a unit in a condominium building. The building must contain at least four dwelling units and can be comprised of detached and semidetached units, row houses, walkups, or an elevator structure. The units must be used for residential purposes, not investment or business related. The development must also be "FHA-approved."
For a condominium project to be approved for an FHA-insured home loan, "the project must have been declared and exists in full compliance with applicable State law requirements of the jurisdiction in which the condominium project is located and with all other applicable laws and regulations."
If it is not an FHA-approved condominium project, it must be a project that meets the Single-Unit Approval requirements. The condominium project must also meet the requirements established by HUD through the SF Handbook 4000.1, including insurance coverage, financial condition, nature of title, the existence of any pending legal action or physical property condition, and other factors that may affect the viability or marketability of the project or its units.
If you are interested in purchasing a condo, the FHA updates its approved list of condominium projects regularly.
FHA Loan Articles
October 30, 2021The FHA Rehabilitation Loan program allows lenders to cover the purchase or refinance, as well as the rehabilitation of the home, as part of a single mortgage. This loan can be used to finance a property that is at least one year old with a total cost of repairs amounting to at least $5,000
October 16, 2021The FHA’s aim is to make homeownership more affordable and accessible for Americans, and it has been doing so for decades. It insures home loans made by FHA-approved lenders so borrowers can purchase single-family and multi-family homes in the US and its territories.
September 20, 2021A down payment is an upfront installment or part of a larger amount paid on a purchase. The remainder is paid off in separate installments, usually with interest, as part of a loan. The down payment represents your initial ownership stake in the home you continue to make payments on.
September 2, 2021For many first-time home buyers, the FHA loan is a popular option. With its lenient credit and income requirements, it appeals to young borrowers who don’t have an extensive credit history, or enough money saved up for a down payment.
July 30, 2021The FHA Streamline Refinance allows mortgage holders to refinance their home loan without going through the process of second appraisal. Since this is a step that was completed with the first FHA mortgage, the FHA waives it for the refinance
July 14, 2021Making the decision to buy a house is a big one, followed by the choice of which house to buy. The next biggest decision you make is going to be the type of home loan you need to go through with the purchase. One option for financing your home is an FHA loan.
