Can a Mortgagee make a loan in a condominium project that is not FHA approved?

The guidance in this FAQ is effective for case numbers assigned on or after October 15th, 2019.

Single-Unit Approval (SUA) refers to approval of a Unit in a Condominium Project (Project) that is not in an FHA-Approved Condominium Project.

The Mortgagee must verify the following:
Condominium Project Approval Status
The Mortgagee must confirm the Project is not in the list of FHA-Approved Condominium Projects at the time of case number assignment.

A Project that is listed in the Condo Lookup is not approved if the “Status” type is:

  • Expired
  • Rejected, including “Registered Single-Unit”
  • Withdrawn
Borrower Eligibility
The mortgage application receives an Accept from TOTAL Mortgage Scorecard or has a maximum Loan-to-Value (LTV) of 90 percent.

Property Eligibility
  • has a Certificate of Occupancy (CO) that was issued at least one year ago or has been occupied;
  • has at least five Units;
  • is not a Manufactured Home; 
  • does not have Ineligible Characteristics (see Handbook 4000.1, Section II.C.2.a.ii.)
Additional criteria for determining property eligibility may include:
  • FHA Insurance Concentration
  • Owner-Occupancy Percentage
  • Recorded Documents
  • Transfer of Control
  • Financial Condition
  • Financial Distress Events
  • Individual Owner Concentration
  • Commercial/Non-Residential Financial Independence
  • Insurance Coverage
  • Properties in Coastal Barrier Resources System
  • Special Flood Hazard Areas
  • Commercial/Non-Residential Space
  • Live/Work Unit
  • Leasehold Interest
  • Litigation

For more information regarding the Single-Unit Approval Process, please refer to: Handbook 4000.1 II.A.8.p.iii available at:  https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

For additional information see:

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-03922