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
June 25, 2021Most first-time homebuyers decide on purchasing a home at least a year in advance, sometimes even a couple of years ahead of time. The earlier you make a decision to buy a home, the more time you have to save up for your down payment.
May 24, 2021With historically low interest rates, the mortgage industry has seen a sharp uptick in refinances. Taking advantage of the current market might be in your best interest and could lower your monthly payment significantly. Don’t forget that refinancing a mortgage comes with closing costs.
May 8, 2021With a new waiver in place, Dreamers have access to affordable FHA home loans designed for first-time homebuyers. There is no discrepancy in the FHA’s eligibility requirements when it comes to DACA status holders applying for an FHA-backed mortgage. They must meet all the same criteria.
April 30, 2021Buying a house is overwhelming to begin with. Make it a seller’s market, and buyers become even more nervous. Supply of real estate has been low for most of 2021, in part because of the Coronavirus pandemic and the historically low interest rates since 2019.
April 23, 2021No matter what kind of market you’re in, it is always best to get pre-approved before going to shop for houses. The last thing you want is to go look at homes, find the one you love, then have to wait on an approval and lose the dream home to another buyer.
April 11, 2021With the trend of falling interest rates since 2019, the number of mortgage refinances around the country has spiked and continues to rise. Borrowers with FHA loans can also capitalize on the low rates, but it may be possible to simplify the process with the FHA Streamline Refinance.
