What exactly is an FHA-approved condo?
An FHA-approved condo is comparable to a conventional unit.
FHA condominiums are still private units within a larger complex containing other teams that share amenities such as parking, gyms, pools, and other building assets.
So, what’s the distinction?
FHA-certified condos, as opposed to conventional condos, must meet specific conditions established by the US Department of Housing and Urban Development (HUD) and are approved by the Federal Housing Association (FHA).
This approval permits buyers to purchase the unit using an FHA loan rather than a traditional mortgage.
Condominium projects must have the following features to be approved:
- Evidence of adequate insurance coverage
- Financial planning and documentation demonstrating how the project’s budget is managed
- Status of outstanding lawsuits
- Documentation of the project’s current state
Loan Requirements for FHA
Considering an FHA-approved condo is the first step toward securing an FHA loan.
There are a few other requirements you must meet before being authorized for this type of loan:
- A credit score of at least 580 is required.
- A minimum down payment of 3.5 percent of the purchasing price
- A debt-to-income ratio of 50% or lower
Ability to pay closing charges and the upfront mortgage premium if your loan does not cover them.
