The Federal Housing Administration will insure mortgages in less than 7% of the nation’s condominium developments, according to the New York Times. Condo projects must be certified (pre-approved) by the FHA before their loans can be made there, and due to the information required, and only the association can make such an application. FHA tightened its financing of condo projects after significant foreclosures during the housing crisis. This is precluding buyers who can only get an FHA loan from purchasing in non-certified projects. The agency has also stopped approving so-called “spot loans” (approving units on a case by case basis) where condo associations have not applied for and received certification. So if you want to buy in a condo complex and use FHA, check whether it is certified before you make an offer.
