CONDO OWNERSHIP
From Listings to Living
You are preapproved for an FHA loan, you have found a two-bedroom condo you love, and the listing says nothing about financing. Two weeks into escrow, your lender calls: the building's FHA approval expired more than a year ago, and nobody on the board renewed it. Now the deal depends on paperwork you never saw.
FHA qualified condos are units that can be financed with an FHA-insured mortgage. A unit qualifies in one of three ways: the building is on FHA's list of approved condominium projects, the individual unit passes FHA's single-unit approval, or the property meets HUD's definition of a site condominium. Project approvals last three years, and anyone can check a building's status in HUD's FHA-approved condominium search.
The approval belongs to the building, not to you, so the search for FHA qualified condos should happen before you write an offer, not after. If you are new to how FHA loans work in general, our explainer on what an FHA loan is covers the basics, and our guide on how to qualify for an FHA mortgage covers your side of the approval.
Leevli Editorial
HUD's Single Family Housing Policy Handbook 4000.1 says a condominium unit must be in an FHA-approved project, meet the site condominium definition, or have completed single-unit approval before FHA will insure a mortgage on it.
The condo form of ownership, rather than the building style, triggers these rules, which is why some townhouses need FHA approval and some do not. Our guide to what a condo legally is explains the distinction.
FHA's current condo rules come from a final rule published in the Federal Register on August 15, 2019, which took effect October 15, 2019, according to HUD's condominium page. The rule set the approval period at three years from the date a project is placed on the approved list.
Approval can come from two directions:
Approval does not renew itself. A recertification can be filed no earlier than six months before the expiration date and no later than six months after it. Miss that window and the project has to start over with a full review. A building with an "Expired" status may be perfectly sound; it may simply have a board that never got around to the paperwork.
The handbook's project standards and single-unit standards overlap, but the single-unit path is stricter in a few places that matter.
| Requirement | Approved project (existing construction) | Single-unit approval |
|---|---|---|
| Owner occupancy | At least 50 percent of units; 35 to 49 percent possible through HRAP if the project is over 12 months old and no more than 10 percent of units are in arrears | At least 50 percent of units |
| FHA loans already in the building | FHA may suspend eligibility above 50 percent of units | Above 10 percent of units in projects with 20 or more units; more than two loans in smaller projects |
| Delinquent dues | No more than 15 percent of units 60 or more days past due | Same |
| Reserves | Funded with at least 10 percent of 12 months of assessments, unless a reserve study supports less | Same |
| Single owner concentration | 10 percent or less in projects of 20 or more units; one unit per owner in smaller projects | Same |
| Commercial space | No more than 35 percent of total floor area, up to 49 percent if residential character is maintained | No more than 35 percent |
| Liability insurance | At least $1 million per occurrence | Same |
| Size and age | Complete and ready for occupancy | At least five units; your unit's certificate of occupancy issued at least a year ago, or the unit has been occupied |
A few more rules apply across the board. The master hazard policy must cover the full insurable replacement cost of the units and common elements, projects with more than 20 units need fidelity insurance, and you need your own walls-in HO-6 policy if the master policy does not cover the unit's interior. Our guide to condo association insurance explains how those layers fit together.
HUD will not approve condo hotels, timeshares, cooperatives, projects with mandatory rental pooling, houseboat projects, continuing care facilities, or projects in the Coastal Barrier Resources System. For project approval, the association also must not face pending litigation tied to safety, structural soundness, habitability or functional use, and other litigation risk must be covered by insurance.
Even in an approved building, your lender rechecks the basics for your specific loan on form HUD-9991, including the owner occupancy share, delinquencies, the master policy and flood coverage where required.
There is a public FHA approved condo list, and it is searchable. HUD's condo search lets you filter by state, county, city, ZIP code, condo name or FHA Condo ID, and by status: Approved, Expired, Rejected or Withdrawn.
In condo-heavy markets, make the search part of your shortlist routine. If you are comparing towers in Brickell, Aventura or Sunny Isles Beach, or vintage buildings in Chicago, run every building through HUD's search before you fall for a unit. Approval status is set building by building, so the neighborhood tells you nothing on its own.
If the project has never been approved, or its approval lapsed, single-unit approval may still get you an FHA loan. The handbook sets conditions on both you and the building:
HUD notes that getting a case number for single-unit processing is not an approval of the unit or the project. The underwriting decision still rests on the documents. Because the 10 percent cap is shared by every FHA buyer in the building, the slot can fill up, and then the next buyer is out of luck until the board pursues full approval.
Most unapproved buildings fall into a handful of patterns:
VA runs its own condo approvals, and an FHA approval does not carry over. According to the VA Home Loan Guaranty Buyer's Guide, VA maintains a list of approved condos, and a project that is not on the list must be submitted to VA for review against VA requirements.
The lender handles that submission. VA's condo approval guide for lenders describes how lenders search for a condo record in VA's WebLGY system, create one if none exists, and upload the package: the declaration, bylaws, amendments, plat map, rules, meeting minutes, budget, and letters on special assessments, litigation and presales. If you are a veteran, ask your lender to check VA's records and HUD's list at the same time; a building can be on one and not the other.
Conventional loans have their own building test, usually called warrantability, and it runs on Fannie Mae and Freddie Mac rules instead of HUD's. The overlap is real, but the two tests are not the same, so a building can pass one and fail the other.
| Issue | FHA project approval | Fannie Mae project review |
|---|---|---|
| Who decides | HUD staff (HRAP) or a DELRAP lender; result goes on a public list | The lender, using Fannie Mae's Condo Project Manager |
| Owner occupancy | Minimum of 50 percent for existing projects, with exceptions | The 50 percent investor concentration limit for established projects was retired in 2026 |
| Single owner concentration | 10 percent in projects of 20 or more units | 20 percent in projects of 21 or more units |
| Commercial space | 35 percent, up to 49 percent by exception | 35 percent |
| Reserves | 10 percent of assessments, or less with a reserve study | 10 percent of the budget, rising to 15 percent for applications dated on or after January 4, 2027 |
The Fannie Mae figures come from its Selling Guide section on ineligible projects and Lender Letter LL-2026-03, which also retired the Limited Review process. Our guide to the non-warrantable condo goes deeper on the conventional side, including litigation and critical repair rules. The practical upshot: a renter-heavy building may now be fine for a conventional loan and still fail FHA's owner occupancy test.
A loan officer who regularly closes condo loans is the right person to make the final call on a specific building. When you are ready to compare buildings, browse listings on Leevli and check each one against HUD's search as you go.
The approval list shows status, not history, and residents know why a building lapsed and whether the board plans to fix it.
Listings show the property, but they rarely explain the lived reality around it. On Leevli, a mover can explore the city, review neighborhood and building information, and ask a verified resident the specific questions that remain unanswered. That human layer helps readers know what to investigate before signing a lease, making an offer, or choosing between two addresses.
Yes. HUD publishes a searchable list of condominium projects with their FHA status: Approved, Expired, Rejected or Withdrawn. You can search by state, county, city, ZIP code, condo name or FHA Condo ID. The list covers project approvals only, so a unit that could still qualify through single-unit approval or as a site condominium will not appear on it.
Search HUD's FHA-approved condominium tool by city or ZIP code, then check each building's status and expiration date. Search by location before name, since a building's legal name often differs from its marketing name. A common mistake is trusting a listing that says "FHA approved" without checking the date, because approvals expire after three years unless the association recertifies.
For existing projects, FHA generally wants at least 50 percent owner occupancy, no more than 15 percent of units 60 days late on dues, reserves funded at 10 percent of assessments unless a reserve study supports less, no single owner holding more than 10 percent of units in larger projects, commercial space within 35 percent of floor area, and full replacement cost and liability insurance.
Three years from the date the project is placed on the approved list. The association can recertify starting six months before the expiration date and up to six months after it. If it misses that window, the project must go through a full review again. Before closing, check that the approval will still be active when your lender orders the FHA case number.
It is a way to finance one unit in a building that is not on FHA's approved list. The lender reviews the project against FHA standards for your loan only. The building needs at least five units, at least 50 percent owner occupancy and, in projects of 20 or more units, FHA loans on no more than 10 percent of units. It does not approve the building for anyone else.
It depends on how your loan is underwritten. If FHA's TOTAL scorecard returns an Accept, the usual minimum of 3.5 percent with a 580 credit score applies. If your loan is manually underwritten, single-unit approval caps the loan at 90 percent of value, so you need at least 10 percent down. On a $250,000 condo, that is $8,750 versus $25,000.
Yes. FHA requires a project to comply with state and local law, to have its governing documents recorded as the state requires, and to carry insurance that meets both FHA standards and any state condominium insurance rules. State condominium statutes differ on reserves, inspections and association records, so check your own state's condo act and ask the association which state requirements shaped its budget and insurance.
VA maintains its own list of approved condominium projects, separate from HUD's. Your VA lender searches VA's records in its WebLGY system and, if the project is not there, submits the declaration, bylaws, budget, minutes and litigation and special assessment letters for VA review. A building on HUD's list is not automatically VA approved, so check both if you are eligible for either loan.
Non-warrantable means a building fails Fannie Mae or Freddie Mac project rules, which matter for most conventional loans. FHA approval is HUD's separate review for FHA-insured loans. The tests overlap on delinquencies, commercial space and insurance, but differ on owner occupancy and single-owner limits. A building can be non-warrantable yet FHA approved, or warrantable but not FHA approved.
No. HUD will not approve condominium hotels or condotels, and the same exclusion covers projects with mandatory rental pooling agreements, timeshares, cooperatives and houseboat projects. Those properties also cannot use single-unit approval, because they carry ineligible characteristics. Fannie Mae likewise treats projects operated as a hotel or motel as ineligible, even when the units are individually owned.
Editorial review: verify current federal and state law, insurance regulations, HOA and condominium statutes, and lender guidelines before relying on any single claim. This article is informational and does not constitute legal, financial, tax or insurance advice.
