Ever hear of an FHA spot approval for a condominium? Probably not. The practice was banned in 2010 after the housing market crash. Since then, if you wanted to finance your condo with an FHA mortgage, that particular condo project had to be FHA approved. Finding an FHA approved project is like finding a needle in a haystack. Suffice to say it is extremely rare.

Fortunately, these regulations have changed!

You can now apply for an FHA Spot Condo Approval, a Conventional Loan, or VA Loan! Here’s what you need to know if you are in the market for a Condo.

Conventional Loan

In order for a condominium to be eligible to receive Conventional financing, the condo project must be a warrantable condo project. There are many requirements that Fannie Mae and Freddie Mac mandate for these condos to meet. Some of these guidelines include annual budget requirements, occupancy requirements, and legal requirements. There are even guidelines pertaining to the condo being a timeshare or a houseboat project. 

Finding out if a condo is warrantable or not isn't an easy task. FHA & VA condos have a website that will show if the condo project is FHA or VA approved. Fannie Mae & Freddie Mac do not provide a list of warrantable condos. However, you can ask your real estate agent if the project is warrantable. We can also reach out to the condo project itself to see if they meet Conventional guidelines.     

FHA Loan 

As previously mentioned, things have changed in the FHA landscape for condos. Originally, the only way to use an FHA loan on a condo project was if the condo project was FHA approved. Finding an FHA approved condo is no small feat, which made financing a condo with an FHA loan a long shot. 

Things have changed for the better! They have recently re-adopted the practice of FHA Spot Condo Approvals. There will still be requirements for the Spot Condo Approval, including occupancy, ownership, and legal requirements. However, this is a far cry from what the options would have been before we had the Spot Condo option. This is an excellent change that will benefit first time home buyers and allow them to get their foot in the door on condo projects they otherwise wouldn't have access to. 

VA Loan

VA Condo financing is still very difficult. Just like the previous FHA condo guidelines, the condo project will have to be a VA approved condo. FHA and VA both have websites that are easily obtainable which have lists of FHA and VA approved condos. 

If you would like to have an experienced mortgage team in your corner, call us at (727) 376-6900.

To start your application click here!

NMLS ID: 327290; NMLS ID: 2062741

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