How to find an FHA approved Condo
FHA-approved condos are particularly attractive to first-time homebuyers because of their lower down payment. For conventional mortgages, you need a down payment of at least 20 percent. Potential homeowners who cannot afford that have an option of a Federal Housing Administration (FHA) loan. FHA loans are by the Federal Housing Administration and are meant for first-time home buyers and those who have not owned a property for at least three years. It requires as low as a 3.5 percent down payment.
An FHA-approved condo is a condo that is eligible for FHA loans. For a condo to be approved, the condo project must have been approved and FHA applications for individual units processed and approved. Also, the property or project must have been completed, therefore, you should never consider a condo that is still in the process of being built for an FHA loan. The property must be insured and no more than 35 percent of the property can be used commercially.
Condo offers flexible terms for buyers and there is also an advantage that the loan is owned by the government not by private lenders, offering more lenient credit requirements. However, condos approved by FHA usually require recertification which occurs periodically. Also, they require Private Mortgage Insurance since the down payment is less than 20 percent. Thus, monthly payment is increased.
Despite the disadvantages, FHA-approved condos are still a go-to for many first-time home buyers.
The Department of Housing and Urban Development search tool is an easy way to see FHA-approved condos in your area.
Search FHA approved Condos via Zipcode
To search, enter your ZIP code to limit the list to condos in your desired area. If you click “send” without filling in any fields, you’ll get results for the entire country. If you want to get results for the state, enter the state you want to see its results.
To see only FHA-approved condo complexes, set the “status” drop-down menu to “approved.” This guarantees that you are seeing properties where the units are eligible for an FHA condo loan. Those who are “expired” are those that their approval whose approval is no longer valid (as they ought to be renewed every three years). The status, “withdrawn” may mean that there is a duplicate record or that the FHA withdrew its approval (not a good sign). You also have an alternative of clicking “rejected” instead of “approved.” Complexes that have been rejected are still eligible for single-unit approvals.