Can I use an FHA mortgage to purchase a condominium?

Yes, the 203(b) program insures lenders against losses for FHA mortgages secured by a unit in a condominium project building, for mortgage terms up to 30 years.   The condominium project must be approved for participation under FHA guidelines.  

Generally, projects must contain at least two dwelling units; can be detached, or semidetached, a row house, a walk-up, or an elevator structure.   The loan is made by an approved FHA lender, such as a mortgage company, bank, or savings and loan association, and is insured by FHA which is part of HUD.   Any creditworthy potential owner-occupant who meets FHA underwriting criteria and will make the condominium unit their principal residence is eligible for a mortgage insured under this program.   There are additional owner-occupancy restrictions for insured condominium loans.   

To find out if a particular condominium project is FHA approved, visit the following HUD website:  https://entp.hud.gov/idapp/html/condlook.cfm 

To locate an FHA approved lender go to:  https://www.hud.gov/program_offices/housing/sfh/lender/lenderlist

For more information regarding condominium projects refer to: 
-   the FHA Condominium Mortgage Insurance Page https://www.hud.gov/program_offices/housing/sfh/ins/sfh_ins_condominiums
-   Mortgagee Letter 2011-22 and Attachment(s) and Mortgagee Letter 2012-18  https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee

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-05133