FHA loans for condo associations – To do or not

FHA Mortgage
FHA Mortgage

FHA loans for condos can be a tricky one. There are pros and cons to having FHA and/or Veteran’s loan approval for condos and the words here alone will not cover it.

Firstly, as in all locations, different price ranges can matter significantly for us in Wisconsin as to whether or not such may be desired.

Secondly, if you are reading this article right now because your agent brought you an offer with FHA financing, and your Association does not have such approval in place with the FHA, you may need to reject the offer or counter that type of financing out.  It can take 90-180 days just to have the process started by FHA.

Although it may be difficult to get such approval, it can be worth the effort if you can pull it off.  The benefit of an FHA mortgage is the fact it allows a borrower to come up with only a 3.5% down payment.  This can be an attractive product, but there are loan limits and rules.

Federally backed programs can be one of the more popular forms of financing, when offered. By not having the ability to get a buyer who wants to purchase using this type of financing may limit possibly qualified buyers. In a declining market, where buying power is limited this could matter to you. For some without FHA approval it could limit possible buyers that are ready and willing to give you the money you want. There are buyers who have great incomes but have not saved a large enough down payment for conventional financing, or simply want to manage with these low down-payment terms.

BE PREPARED: There are rules that must be complied with in order to have FHA and/or Veterans loan approval, and members may not like them.  Some members may be ok with the rules, and maybe other Association members will not, and if the Association rules have to be changed members could vote against.

While getting your condo complex FHA approved may not be up to you individually, it could be important to convince the association of the potential.  As an Association this question should be asked, even if the answer is a resounding ‘no.’  Having been approved with FHA and Veteran’s mortgages can bring in more buyers, but it may go against the reasons that make all the appeal for your Association.

The opposite can also be true, as keeping documents up to date to be in good standing is not an easy task with more rules to follow.  Some of the rules can be seen as deterrents, so this is nothing to be rushed in to.

Below is the follow-up letter from the National Association of Realtors to House Sec Carson for clarity and improvement of the rules.


Check VA and FHA Condo Approval Status

This page will link you to the current 2019 VA and FHA Condo Approval lists.  From there you can check the current VA and FHA Condo Approval status.  You may find that “Expired”, “Withdrawn”, “Rejected” or “Soon to Expire” are other potential statuses.

Check if your Condominium or Homeowners Association (HOA) is currently VA or FHA Condo Approved.  Below are past official lists:

If you want to learn if a particular Association is FHA approved, email us and we will research it for you.