What Is an FHA-Approved Condo?

An FHA-approved condo is a condo that qualifies to be purchased with an FHA loan. An FHA loan is a type of federally insured mortgage that can be used to purchase condos as well as houses. It may be a good option if you can't qualify for a conventional loan. However, only certain condos are FHA-approved, and borrowers must meet certain requirements to qualify. This guide explains which condos meet FHA requirements and how to find them.

What are FHA-approved condos?

For years, a condo could be FHA-approved only if the entire community completed the HUD review and approval process (HRAP). However, under a policy change adopted in 2019, individual condo units can be approved through the single-unit approval (SUA) process, provided they meet certain HUD standards.

Additionally, the Direct Endorsement Lender Review and Approval Process (DELRAP) can help speed up FHA condo approval. This process allows qualified Direct Endorsement (DE) lenders — rather than FHA staff — to review and approve condos for FHA loans without the FHA’s direct involvement.

A condo must be approved by one of these two methods before you can use an FHA loan to purchase it.

Learn More: Everything You Need To Know About Buying a Condo

What are FHA condo requirements?

Lenders, builders, developers, condo associations, management companies, project consultants, or attorneys acting on behalf of these entities can apply for FHA condo approval. But borrowers, homeowners, sellers, and Realtors generally can’t. 

General criteria for condominium approval include:

• Percentage of FHA-approved units: For an entire condominium project to be approved, no more than 50% of the units can be FHA-insured. For single-unit approvals in projects with 20 or more units, the number of FHA-insured units can't exceed 10%. The limit for single-unit approval in projects with fewer than 20 units is 2 FHA-insured units.
• Reserves: At least 10% of the homeowners association's (HOA's) annual budget must be allocated to cash reserves, unless a reserve study finds a lower amount is acceptable. 
• Residents current on fees: At least 85% of owners must be current on their HOA dues.
• Nonresidential space: Commercial or nonresidential space generally can’t exceed 35% of the project’s floor area.
• Owner occupancy: Generally, condo projects must have at least 50% owner occupancy. 
• Insurance: The project must meet FHA insurance requirements.
• Approval renewal: FHA approval must be recertified every 3 years.

Single-unit approval

Even if a full condominium development doesn’t meet FHA approval standards, individual units can still qualify for an FHA mortgage with single-unit approval, formerly called “spot approval.”

Although the entire condominium project doesn't need to be FHA-approved, it still has to meet certain project-level requirements, including concentration of owner-occupied units, insurance coverage, and nonresidential space. However, the limits on FHA-insured units in the whole project are much lower with single-unit approvals.   

How do you find FHA-approved condos?

You can look for FHA-approved condos by using HUD’s online condominium search tool.

This tool allows you to search FHA-approved condos by location. Enter your search criteria, browse results, and review details about approved condos, including their condo ID, FHA concentration, and expiration date. 

What if a condo isn’t approved?

If a condo isn’t FHA-approved, “don’t walk away yet,” says Adrianna Montes, founder and CEO of Florida Dreams Realty Group, Inc.

“First, confirm whether the building is simply not on the approved list versus actually ineligible," says Montes. "If the whole project is not approved, ask your lender about FHA single-unit approval.”

While you can’t apply directly, an FHA-approved lender can file the paperwork on your behalf. Conventional loan vs. FHA loan

If you’re interested in a condo that isn’t FHA-approved, you could potentially purchase it with a conventional loan instead. Generally, you’ll need a credit score of at least 620 to qualify, but you may be able to make a down payment as low as 3%. Your condo will also need to meet your lender's standards.

However, even if you’ve found an FHA-approved condo, it could make sense to use a conventional loan instead, especially if you want to limit the cost of mortgage insurance.

Mortgage insurance premiums

Unlike FHA loans, an upfront premium isn't mandatory when you put less than 20% down with a conventional mortgage. (You can choose to pay a one-time PMI premium upfront at closing rather than having it added to your monthly mortgage payment.) Also, you can get PMI removed from a conventional loan when your loan balance is 80% or less of the home’s original value — you must typically pay mortgage insurance for the duration of an FHA loan.

Read More: First Time Homebuyer Programs: How They Can Help You

Are FHA-approved condos worth it?

FHA condos are often worth purchasing when buyers prefer a small down payment or don’t have a strong credit profile.

“FHA condos fit buyers who want to keep cash in their pocket and live in the home themselves,” says Montes. “That’s often first-time buyers, buyers with a thinner or rebuilding credit profile in the high 500s to low 600s, and people who would rather put 3.5% down than drain their savings for a 20% conventional down payment.”

On the other hand, finding an FHA-approved condo might be difficult. As of July 2026, a search of HUD's online locator tool showed fewer than 14,000 approved condominium projects and submissions nationwide. Also, FHA loans require mortgage insurance premiums, or MIP, which increases your total housing costs.

If you have the credit to qualify for a conventional mortgage at a favorable rate, an FHA loan may not be the most cost-effective option. 

Pros and cons of FHA-approved condos

If you’re thinking about buying an FHA-approved condo, consider the following pros and cons:

Details on the pros

• FHA loans may be easier to qualify for: FHA loans have less stringent credit score requirements than conventional loans. You can qualify with a credit score as low as 500 with a 10% down payment, or 580 with a 3.5% down payment.
• Condos are relatively affordable: Condos tend to be more affordable than single-family homes. According to home search platform Redfin, the median sale price of a single-family home was $408,714 in May 2026. It was $339,556 for a condominium or co-op.
• Homeownership with fewer responsibilities: Condos offer the benefits of homeownership and equity growth without the obligation of maintaining the entire property. Generally, you’re only responsible for maintaining the interior of your unit.

Details on the cons

• Limited availability: FHA-approved condo options are limited. You'll have fewer condo choices and potentially face more competition, which may drive up prices.
• Mortgage insurance required: FHA mortgages require mortgage insurance premiums. All FHA borrowers must pay an upfront premium of 1.75% and an annual premium of 0.15% to 0.75%, depending on the size of the down payment, loan amount, and loan term. If your down payment is below 10%, you must pay the annual premium for the duration of your loan.
• HOA fees affect borrowing power: “HOA fees count toward your DTI (debt-to-income ratio) the same way a car payment does,” says Ashley Harris, director of homebuyer education at Neighbors Bank. "That means a monthly HOA fee directly reduces how much mortgage you can qualify for, sometimes significantly.” 

Learn More: What a Homeowners Association Is and How It Works