FHA condo approval: what to check before you offer

Last updated: March 13, 2026

What do I need before I check a condo for FHA?

To check a condo for an FHA loan, you need the building's exact name and address and your homeowners association (HOA) contact. You also need your credit score, your down payment and your 2026 county loan limit. FHA is the Federal Housing Administration, part of HUD (the U.S. Department of Housing and Urban Development), and it insures these loans. Most of it takes one sitting.

• The project's legal name, taken from the HOA documents. It can differ from the sign out front.
• A contact at the HOA or its manager, who answers questions about the project.
• Your credit score, since it sets how much FHA will lend against the home's value.
• Your down payment cash and where it sits.
• Your county's 2026 loan limit, because your loan amount has to fit under it.
• Recent bank statements, pay records and business tax returns.

In California, HUD's 2026 FHA limit for a one-unit home in San Diego County is $1,104,000. Across the country, HUD's 2026 one-unit limits for forward FHA loans run from $541,287 in most counties up to $1,249,125 in high-cost areas. That limit caps your loan, not the price you pay. Conventional loans use a separate limit, which I cover in San Diego's 2026 conforming limit.

According to the CFPB (Consumer Financial Protection Bureau), FHA allows down payments as low as 3.5 percent. HUD ties that minimum to a score of 580 or higher; from 500 to 579, loan-to-value (LTV) tops out at 90 percent. LTV is the loan divided by the home's value, so a lower score means more cash at closing.

A lender can require a higher score than FHA's minimum, so ask yours what it wants. HUD also wants most loan documents no more than 120 days old at disbursement, the day the loan funds. A slow condo review can age your bank statements past that.

Step 1: Look up the project on FHA's approved condo list

An FHA loan on a condo works the usual way when the project is approved by HUD or a HUD-authorized lender. FHA keeps a list of approved projects. Ask your lender or agent to check the building's legal name against it, and have your lender confirm the status in writing.

Federal rules allow two other routes besides an approved project: a site condominium and Single-Unit Approval. A site condominium usually means you own the structure and the land under it, with a condo setup for shared areas. Your lender confirms which route a unit fits, so treat your own search as a first look.

You're done when you've found the project with an approved status, or you know for sure it isn't listed.

Step 2: Check whether Single-Unit Approval can work

If the project isn't on FHA's list, Single-Unit Approval can still make your one unit eligible. The project has to pass every test in that row of the table above, including FHA's project standards. One that trips people up: HUD can't have flagged the project with an adverse determination, which means HUD has marked it as a problem.

HUD can also stop issuing case numbers once too many units in a project already carry FHA insurance. A case number is how an FHA file gets started. Without one, the unit can't move forward on FHA.

Shopping lenders helps here. I work with a network of wholesale lenders, not one bank's rulebook. Different lenders want different deals, and my job is finding the one that wants yours.

Step 2 is finished when your lender confirms the unit can go through this route.

Step 3: Write the offer with FHA's appraisal clause and enough time

An FHA condo offer usually needs HUD's amendatory clause. That clause says you don't have to buy, or give up your earnest money, if the appraisal comes in under the sales price. Earnest money is the deposit you make with your offer. The clause applies on most FHA purchases when you didn't get the lender's statement of appraised value before signing.

HUD wants the actual sales price written in the clause. You can still choose to go ahead if the value comes in low. For questions about earnest money or contract wording, ask your buyer's agent or a real estate attorney.

Leave the contract room if your unit is taking the Step 2 route. Escrow is the stretch between a signed contract and closing, and the longer it runs, the older your paperwork gets. HUD's 120-day document rule can force fresh bank statements before closing. Tax returns don't age out, though self-employed buyers should read Do lenders re-check self-employed income before closing?

Don't count on fixing a low appraisal yourself. On an FHA loan, only the underwriter can ask the appraiser to reconsider, and borrowers no longer have their own right to request it.

The offer is ready when the contract has the clause with the actual price filled in, plus a timeline with room for the Step 2 route if you need it.

Self-employed? Check your income path at the same time

If your tax returns show less than you earn, settle your income path and your condo path together. A bank-statement loan isn't FHA, so that lender's condo rules apply instead of FHA's list. A condo that clears FHA can still fail a different lender's review, and the reverse happens too.

Your accountant saving you on taxes isn't the end of the road. We close bank-statement, asset-based and non-warrantable condo loans that retail banks turn away. A non-warrantable condo is one that falls outside the standard rules many lenders use. I explain how the income side works in Bank-statement loans: how self-employed buyers qualify when their tax returns show less than they make.

How many years of returns FHA wants from you is a file question. I won't guess at it here. Your lender answers it after reading your actual returns.

What will an FHA condo cost each month?

According to the Consumer Financial Protection Bureau (CFPB), every FHA loan carries mortgage insurance, so your FHA condo payment includes FHA's premiums on top of principal, interest, taxes, insurance and homeowners association (HOA) dues. Mortgage insurance protects the lender, not you, and you pay for it.

Under HUD's current premium schedule (Mortgagee Letter 2023-05), FHA charges an upfront premium of 1.75% of the base loan on forward mortgages. Lenders often let you roll it into the loan, so it can raise your balance from day one.

The annual premium is a second charge. On a forward FHA loan longer than 15 years, HUD's schedule sets it at 0.5% to 0.55% of the loan, or 0.7% to 0.75% on loans above $726,200. You pay it in monthly pieces, so it shrinks what you can spend on price and HOA dues.

How long you pay depends on where your loan starts. Under the same HUD letter, on an FHA loan longer than 15 years, the annual premium runs 11 years if you start at 90 percent of the home's value or less. Start above that, and you pay it for the life of the loan. More down can cut years of premiums.

The example below is a general one, not an FHA quote. It shows how a rate, an APR (annual percentage rate, the yearly cost including certain fees) and a payment travel together.

Example: a $400,000 30-year fixed loan at 6.11% (6.181% APR) with 20% down ($100,000) on a $500,000 home has 360 monthly payments of $2,426.56 in principal and interest. The APR assumes 0.75 discount points ($3,000, the median paid by 2023 home buyers who paid points, according to the CFPB) and no other lender fees. Taxes and insurance are not included, so the actual payment will be higher. The rate is the market average for March 12, 2026 from Freddie Mac Primary Mortgage Market Survey; yours depends on your credit, loan and property.

FHA mortgage insurance isn't in that example, and neither are HOA dues. Its down payment is also bigger than many FHA buyers make. For the two loan types side by side over time, see my FHA vs conventional cost comparison.

One more note on HOA dues. Fannie Mae's guide counts HOA dues in your debt-to-income ratio, but that rule is Fannie Mae's and doesn't describe FHA. Ask your lender how dues enter your FHA numbers.

Common mistakes with FHA condo offers

The FHA condo mistake that does the most damage is writing the offer before anyone has checked the project. You then find out partway through escrow that the unit doesn't qualify.

• Skipping the project check. Nobody confirms the FHA route until the contract is signed.
• Assuming any building fits. An unfinished project, fewer than five units or a HUD flag rules out the Step 2 route.
• Leaving the price blank. The amendatory clause needs the real number in it.
• Letting documents go stale. A long escrow can push statements past HUD's 120-day limit.
• Taking one no as final. One lender's answer isn't the whole market's.

I saw that last one with a first-time buyer. Two lenders backed out of her condo over investor-owned units. We placed it with a lender that does non-warrantable condos every week. She put down more than she planned, and she owns it. That was a conventional loan, not FHA, but it shows what a different lender can mean.

How I know this

I've worked in mortgages for 21 years as a Senior Loan Officer at Rate Rebel (NMLS #282828) in San Diego. As a broker, I shop one file across many wholesale lenders. The condo routes here come from federal rule 24 CFR 203.43b and HUD's Handbook 4000.1. The buyer two lenders turned down is why I compare other lenders before anyone gives up on a unit.

What's my next step after the three checks?

If the project is listed, write the offer with the amendatory clause. If it isn't listed but meets the Single-Unit Approval conditions, write it with extra time. If it fails both, or your tax returns won't support FHA, compare a non-FHA condo loan from a lender that finances non-warrantable condos, which may need more down, or look at another building. I lend in California, so if that's where you're buying, send me the building's name and your numbers from this page.

None of these routes promises an approval or a closing date. The lender's review decides both.

Before you send anything, run your numbers. My free calculators show your buying range and the real payment in a few minutes, with no credit pull. To see how income and dues shape that payment here, read $150K income in San Diego: what sets your payment.

Questions buyers ask about FHA condo approval