Eligibility
Understanding FHA Condo Eligibility Criteria
To be eligible for FHA insurance, a condo must meet certain requirements and standards set by the Federal Housing Administration (FHA). This page provides a comprehensive overview of the eligibility criteria for FHA approved condos, as well as the factors that can make a condo ineligible for FHA insurance.
Eligibility Criteria for FHA Condo Approval
Whether you’re a prospective condo buyer, current condo owner, or a property management company looking to ensure FHA approval for your project, this page will provide you with the information you need to determine if your property meets the eligibility criteria for FHA approved condo status.
If you’re unsure whether your condo project meets these requirements, don’t worry. Our team is here to assist you every step of the way and help you navigate the approval process. To learn more about additional approval criteria, visit our page List of Required Docs for a list of required documents and submission requirements.
Eligible Condominium Projects
- Existing Construction
- Complete Condominium Project
- Conversions
- Gut Rehab (completed)
- Non-Gut Rehab
- Two- to Four-Unit Condominium Project
- Manufactured Housing
- Leasehold Interest
What Makes a Condo Eligible for FHA Approval?
- The condo must be primarily residential in nature and not intended for rental for transient or hotel purposes
- It must consist only of one-family dwelling units
- It must be in full compliance with all applicable federal, state, and local laws
- It must be complete and ready for occupancy
- It must be reviewed and approved by the local jurisdiction
Occupancy Requirements for Approval
- The acceptable level of owner occupancy percentage for complete condominium projects and gut rehab conversions is at least 30% of the total number of declared units in the project
- Existing construction condominium projects that are more than 12 months old, with an owner occupancy percentage of at least 35% and less than 50%, may be eligible for approval with certain conditions
Insurance Concentration and Eligibility
- FHA insurance concentration refers to the number of FHA-insured mortgages within a condominium project
- FHA may suspend project eligibility of condominium projects where the FHA insurance concentration is greater than 50% of the total number of units in the project
Ineligible Condominium Projects
- Cooperative ownership
- Condominium hotel or condotel
- Mandatory rental pooling agreements that require Unit owners to either rent their Units or give a management firm control over the occupancy of the Units
- Timeshare or segmented ownership projects
- Multi-dwelling condominiums (more than one dwelling per Condominium Unit)
- Houseboat project
- Continuing care facility
- Coastal Barrier Resources System location
- Subject to adverse determination for significant issues as identified by FHA
