What are the FHA definitions for new and existing condominium project types?

Condominium project types are defined as follows:

New Construction refers to: Proposed Construction; Under Construction; and Existing Less than One Year:

  • Proposed Construction Project:  A Property where no concrete or permanent material has been placed. Digging of footing is not considered permanent.
  • Gut Rehabilitation (Gut Rehab)  Properties where the renovation is down to the shell of the structure, including the replacement of all Heating, Ventilation and Air Conditioning (HVAC) and electrical components.  Gut Rehabs must meet the general FHA Condominium Project Approval Requirements and New Construction standards.
  • Under Construction Project:  The period from the first placement of permanent material to 100 percent completion with no Certificate of Occupancy (CO) or equivalent.
  • Existing Less than One Year:  A Property that is 100 percent complete and has been completed less than one year from the date of issuance of the CO or equivalent. The Property must have never been occupied.
Existing Construction Project:
Property that has been 100 percent complete for over one year or has been completed for less than one year and was previously occupied. 
  • Non-Gut Rehabilitation:  The rehabilitation work that is not structural and is limited to minor property repairs and improvements.  All “Non-Gut Rehab” work/repairs must be completed and meet the Standards for Existing Construction.
For case numbers assigned October 15, 2019 and after, additional information regarding condominium project types can be located in:  Handbook 4000.1, Sections II.A.8.p.ii.(H)(I) and II.C.2.d. available at: 

For case numbers assigned prior to October 15, 2019, information is available in:
  • Mortgagee Letter (ML) 2011-22 Condominium Approval Process for Single Family Housing – Consolidation and Update of Approval Requirements and the attached Condominium Project Approval and Processing Guide provides the requirements and procedures for obtaining FHA condominium project approval.
  • ML 2012-18 Temporary Approval Provisions for FHA Condominium Project Approval provides temporary condominium project approval guideline changes to address current housing market conditions.
  • ML 2015-27 Additional Temporary Approval Provisions for FHA Condominium Project Approval
  • ML 2016-15 FHA Condominium Project Approval – Owner Occupancy Requirements modifies the Condominium Project Approval and Processing Guide, attachment to ML 2011-22, in order to implement the Housing Opportunity Through Modernization Act of 2016 (HOTMA) requirements and establish the required owner-occupancy percentage that must be met for purposes of FHA project approval.
Note: The Temporary Provisions in ML 12-18 and ML 15-27, as modified by ML 2016-15, are effective until HUD publishes and implements the Final Rule of Condominium Project Approval through publication of the Condominium Project Approval Section of HUD Handbook 4000.1, as extended by ML 2017-13.  Mortgagee Letters are available at:

For more information regarding condominium projects refer to:  


All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-02393