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How to Find and Buy FHA-Approved Condos

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Content was accurate at the time of publication.

If skyrocketing home prices have you wondering if you can afford to buy a home or save enough for a down payment, you may want to consider a more affordable option like a condo. FHA-approved condos are in reach for more homebuyers than ever, thanks to 2019 changes in the Federal Housing Administration’s (FHA) rules that allow individual condos to qualify for FHA loans, even if the entire condominium project in which they’re located is not approved. 

FHA loans are a great option for buyers who can’t meet the credit- or down-payment requirements for conventional loans. They also typically come with more competitive interest rates, since they’re backed by the U.S. Department of Housing and Urban Development (HUD).

What are FHA-approved condos? 

A condominium (“condo”) is a privately-owned unit within a larger building of other units. In legal terms, you own your unit but have an “interest” or right to use the common areas and features of the condominium complex. Generally, condo owners pay condominium association dues for the upkeep of shared common areas, such as garages, pools, outside hallways, gyms and clubhouses. You can buy a condo using a conventional or government-backed loan, but the advantage of an FHA loan is that you can qualify with a lower credit score, put only 3.5% down and still enjoy relatively low interest rates. 

FHA-approved condos are simply condos that have been approved by HUD, or a HUD-approved lender, to receive an FHA loan. They can be approved as groups of units within an entire approved condo project, or as individual units residing within unapproved condo projects. 

To receive this approval from HUD, a condominium project must provide:

  • Proof of sufficient insurance coverage
  • Financials to show how it manages its budget
  • The status of any outstanding lawsuits
  • The condition of the property

How to find FHA-approved condos 

If you have your heart set on purchasing a condo financed by an FHA loan, you’ll want to check whether the condominiums you’re interested in are FHA-approved. This is easy to do online using HUD’s condominiums database: Just enter your search terms and select “approved” from the status list — and your search will generate an FHA-approved condo list. This list can help you locate nearby FHA-approved homes or, if you’ve already got one in mind, will tell you whether the condo is FHA-approved. Notably, the condominiums database isn’t only for approved condos, but all condos that have engaged with the FHA approval process. In addition to approved condos, it may return results for condos that are in the process of becoming approved or have had their FHA-approval rejected or withdrawn.

To look up a specific condo you’re interested in, you’ll need the following information:

  • Condo name. If the condominium is for sale, most likely the listing data will provide the condo name that the project was incorporated under. For a broader search, you can also sort by city, state, county or ZIP code.
  • Condo ID. The FHA assigns a seven-character condominium project ID and a three-digit submission number to each project in its system. Your lender or real estate agent may have access to this information.
  • Status. If you only want your search results to show condos that are already approved, select “approved” from the pull-down menu. If a project is approved, then it’s eligible for FHA financing. If you don’t limit your search to approved condos, you’ll see information indicating if a project’s approval was rejected, withdrawn or has expired.
  • Begin and end date. If you’d like to limit your search results to condos whose HUD approval status became effective within a certain date range, you can do it here.  

Red flags when searching for FHA-approved condos 

The search results returned by the HUD condominiums database give important information. However, you have to know what to look for in the data before you can confidently move forward to the next step of pursuing FHA loan approval (or, if your unit isn’t in an approved condominium project, single-unit “spot approval”). Here are some red flags that may mean the condo you have your eye on isn’t compatible with an FHA loan:

Composition of the project. The FHA has specific guidelines about the number of buildings and phases that are permitted, along with how many must be owner-occupied. No more than65% of units in a project may be owned by investors in order to gain FHA approval. 

FHA concentration. Only 10% of the condos in a project can have active FHA loans (for projects with less than ten units, only two FHA units are permitted). The “FHA concentration” column will show the current percentage in a project.

Expiration date. If the word “expired” shows up in the “Status” column, it could complicate your path to FHA financing. Condominium associations must provide updated financials and submit the proper forms in order to maintain their FHA condo approval status. You can apply for single unit approval (also known as “spot approval”) instead, but it’ll take more time and effort than buying a unit in an already-approved project.

Pros and cons of an FHA-approved condo 



  Easier to qualify for

  Can put building wealth in reach

  Less expensive 

  Requires mortgage insurance 

  Ongoing recertification 

  High demand 


  Affordable. FHA loans and condos are both popular choices for first-time home buyers because they make entering the housing market more affordable. Around 84% of FHA-approved condo buyers are first-time buyers.

  Easier to qualify for. FHA loan requirements are more flexible than the strict credit and down payment requirements demanded by conventional loans.

  Can put building wealth in reach. Owning a home allows you to build equity, and because FHA loans only require a down payment of 3.5%, they give buyers an opportunity to start building equity sooner rather than spending years saving for a 10% or 20% down payment.

  Less expensive. The median single-family home price in the US was $406,000 in February 2022, while the median condo price was only $319,000. 


  Requires  insurance. You’ll have to pay for both upfront and annual mortgage insurance.

  Ongoing recertification. FHA-approved condos have to be recertified every three years or they’ll lose their HUD approval. After that, a condo seeking approval has to start a new application from scratch.

  High demand. Condos are in increasingly high demand, in part because single-family homes have become so expensive. As a result, the price of condos is going up and the amount of condos available is falling — according to a recent Redfin study41% of buyers paid over the listed price in February of 2022.

How to buy FHA-approved condos 

Condos can offer a happy medium between owning and renting: Each monthly payment builds equity in a home you own, but most of the exterior maintenance is covered by the condo association.

Even better: The minimum FHA mortgage requirements for condos are the same as for single-family homes. You’ll need the following:

  • A 3.5% down payment if your credit score is 580 or higher; a 10% down payment if your credit score is between 500 and 579
  • A minimum credit score of 580
  • A debt-to-income (DTI) ratio of 43% or lower
  • Be willing to live in the condo as your primary residence for at least one year

Factor in monthly condo fees

Monthly condo association dues can add up quickly, ranging from a median price of $200 to over $500 per month. The fees cover building maintenance and common areas, as well as the salaries for building employees (e.g. concierges, landscapers and porters). Condo associations sometimes charge special assessment fees, too, for major upgrades like elevator repairs or a new roof after a major storm. Consider whether you can afford these monthly fees as you weigh the decision to buy an FHA-approved condo.

What if a condo is not on the FHA-approved condo list?

It used to be the case that if you wanted an FHA-approved condo, it had to be a unit within an FHA-approved project. In 2019, however, HUD changed the rules in order to allow more flexibility and boost the number of condos eligible for FHA loans. Under the new rules, single condos within projects that are not approved can be approved through a single-unit approval process sometimes called “spot approval.” 

There are several important factors the FHA considers with this type of single-unit approval:

  • The condominium must be ready to live in. Units that are proposed or under construction are not eligible.
  • The project must have at least five total units.
  • Manufactured housing is not permitted. Only units in FHA-approved manufactured home condominium projects can be approved.
  • The number of units with FHA financing. As mentioned above, no more than 10% of the units in a project with at least 10 units can be financed with FHA loans. For projects with less than 10 units, only two units may be insured by the FHA.
  • The number of units occupied by their owners. At least half of the owners of a condo project’s units must live in their units.
  • The legal standing of the condo project. HUD will review a number of factors relating to the legal ownership and control of the project and its units, including the condo association’s covenants and whether the proper insurance policies are in place.

Mortgage alternatives if your condo is not FHA-approved 

If the unit you love doesn’t qualify for FHA financing, don’t panic. You have several other condo mortgage options, including:

Fannie Mae and Freddie Mac condominium loans. You may be able to snag a condo with a 3% down payment if you’re eligible for the Fannie Mae HomeReady® or Freddie Mac Home Possible® programs. However, you’ll need at least a 620 credit score to qualify, and income limits apply. 

VA-approved condominium loans. Eligible military borrowers can purchase a condominium with no down payment with a loan guaranteed by the U.S. Department of Veterans Affairs (VA). As with FHA loans, the condominium must be approved by the VA in order to qualify for a VA loan. Request a VA customized condo report to access information from the VA’s list of approved condos. There is no minimum credit score required for VA loans.

USDA condominium loans. The U.S. Department of Agriculture (USDA) backs loans with no down payment, including condos in designated rural areas. No minimum credit score is required and income limits apply.

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