How do I submit an exception request for a mixed-use condominium project?

No more than 25% of the floor area in a project or a unit may be for non-residential/commercial purposes. The non-residential space must be homogenous with residential use, and free of adverse conditions to the occupants of individual condominium units.

A project with non-residential/commercial space less than or equal to 25% can be approved under the HUD Review and Approval Process (HRAP) or Direct Endorsement Lender Review and Approval Process (DELRAP) options.

Consideration of exception requests is limited to mixed use condominium development projects. Requests must be reviewed under the HRAP option. Requests to exceed the current non-residential/commercial space requirements may not be reviewed using the DELRAP option.

Exception requests will be considered on a case-by-case basis and must be submitted to the jurisdictional Homeownership Center (HOC) following the instructions provided in Mortgagee Letter (ML) 2012-18 for projects with non-residential/commercial space >25%. FHA may reject any exception request received. Based on the HOC review, additional information and/or documentation may be required. Granting an exception does not change the requirements.

Exception requests for mixed-use developments unable to satisfy the 25 and/or 35 percent space requirements must be submitted to the Philadelphia HOC addressed to the Processing and Underwriting Division – Technical Branch 1.

The HOC mailing addresses can be found on page 76 of the Condominium Project Approval and Processing Guide using the following link:

For more information regarding condominium projects refer to:
  • The FHA Condominium Mortgage Insurance page
  • ML 11-22 and Condominium Project Approval and Processing Guide
  • ML 12-18 Temporary Approval Provisions for FHA Condominium Project Approval
  • ML 15-27 Additional Temporary Approval Provisions for FHA Condominium Project Approval  
  • ML 16-15 FHA Condominium Project Approval – Owner Occupancy Requirements 
  • 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

To search for approved condominiums please visit

To identify the jurisdictional HOC for the state where the condominium project is located please visit

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-03952