Can You Buy a Condo With an FHA Loan on a Primary Home?

The Quick Read: Yes, but only when the condo project itself qualifies, and only when you will live in the unit as your principal residence. The building has to be on HUD’s approved list, or it has to clear a one-unit exception called Single-Unit Approval. Your own credit, income and down payment are reviewed separately, the same as any FHA purchase.

Why the Building Matters as Much as You Do

An FHA loan on a condo is a three-part test: you, the unit, and the building. Most buyers prepare for the first two and get surprised by the third.

Under HUD’s FHA condominium guidance, FHA insures a mortgage on a one-family unit in a project, together with an undivided interest in the common areas. Terms run up to 30 years, and the loan can be used to purchase or to refinance. The statutory basis is Section 203(b) of the National Housing Act.

Here’s the catch. You can be fully qualified and still lose the contract, because the association’s finances, insurance, legal standing and occupancy mix are underwritten too. HUD names the project-level factors: insurance coverage, financial condition, nature of title, pending legal action, physical condition, and anything else affecting viability or marketability.

The borrower is approved. The building isn’t. Learning that before an offer is a far cheaper lesson than learning it after an appraisal.

If you want the program overview first, Lendmire’s FHA loan programs page covers the basics. The rest of this article is about condos specifically.

The Borrower Side: What FHA Asks of You

The borrower rules are the same for a condo as for a house. Based on the wholesale programs Lendmire works with, the envelope looks like this, subject to lender guidelines and full file review:

• Maximum financing and the minimum investment depend on the borrower’s decision score, with a score of 580 or higher required through the wholesale programs Lendmire works with.
• An upfront mortgage insurance premium, which can be financed.
• An annual mortgage insurance premium that varies by term, loan amount and LTV.
• Housing and total debt ratios that start at a base level with no compensating factors and reach a higher ceiling at the top tier with documented factors. The automated finding governs most files.
• Owner-occupied principal residence only. A non-occupant co-borrower is allowed.
• County loan limits apply and change every year.

HUD’s own rules reach lower on credit than these programs do. The wholesale programs Lendmire places loans with start at 580, so the lower HUD tier is not something the network reaches.

Seller or interested-party contributions can go to 6% of the price on these programs. In a condo, that can matter, because association dues and move-in costs add up.

Two Routes: Approved Project or Single-Unit Approval

There are two ways a condo can work with FHA. Either the project is on HUD’s approved list, or the project isn’t approved and the lender gets the single unit approved.

Route A: the approved project. HUD defines an approved condominium project as one meeting FHA’s approval requirements under its DELRAP or HRAP processes. The lender still completes the loan-level review for your unit.

Route B: Single-Unit Approval. Often called spot approval. HUD says the project must be complete and ready for occupancy, have at least five dwelling units, and not be a manufactured home project. Condos in projects under five units, or still under construction, are out.

One more distinction. Two- to four-unit buildings are not condo projects. They follow separate rules.

How to Check a Building Before You Make an Offer

Start with HUD’s FHA Connection condo list. Per HUD’s field descriptions, “Approved” means FHA applications can be processed for units in that project. “Expired” and “Withdrawn” mean they can’t. A “Rejected” status can also flag a project that works only through single-unit approval.

Approved status isn’t permanent. That is the most common misconception. Check the current status every time, not a screenshot from a listing.

A practical sequence:

1. Look the building up on the HUD list.

2. Share the address and status with your loan officer before you write an offer.

3. Ask your agent or the association’s management company for the documents the lender will need.

4. Let the lender choose the route: loan-level review for approved projects, Single-Unit Approval for others.

5. Keep the contract’s financing contingency in place until the building is cleared.

Timing is where association responsiveness shows up. HUD’s instructions for Form HUD-9991 say the lender completes it using information gathered within the last 90 days from verifiable sources, including the association or its management company and public records. A slow management company can slow your file. An old approval packet doesn’t substitute for fresh data.

What “Primary Home” Really Means for a Condo

FHA is an owner-occupant program. The unit has to be your principal residence, which is the home you live in. It is not an investment condo, and it is not a vacation condo.

For a buyer, that raises practical questions the typical guide skips:

• Can a co-borrower who won’t live there be on the loan? On the programs Lendmire places, yes. A non-occupant co-borrower is allowed.
• Can you rent the condo out later? The occupancy rule is about the purchase. If you plan to rent from day one, that isn’t an FHA purchase. If life changes later, talk to your loan officer before acting, because the occupancy certification you sign is a real commitment.
• Can you buy a second FHA condo? That depends on a documented need, such as a job relocation, and on the lender’s review. Don’t assume it.

If the title question is really about a rental or second home, the short answer is that occupancy decides the leverage. FHA financing is built for the home you live in. Other loan types exist for other uses.

Occupancy Inside the Building: A Different Test

There’s a second occupancy test, and it has nothing to do with you. FHA looks at the share of units in the building that are owner-occupied.

On HUD’s Form 9991, a unit counts as owner-occupied if the owner lived in it for part of the calendar year and did not rent it out for most of the year. A builder- or developer-owned unit never counts.

The Federal Register’s discussion of the 2019 final rule describes a general owner-occupancy figure of 50 percent for existing projects, lower where specific lower-risk indicators are met, and as low as 35 percent under an HRAP review. HUD can adjust these by notice. Treat them as a general picture, and let your lender confirm the current figure for your building.

A building full of investors can fail even when every unit is well kept. That’s worth knowing before you fall in love with a unit.

What Reviewers Look For in the Building

The lender’s questionnaire collects a lot. HUD’s single-unit documentation list shows Form 9991 collecting information on:

• The association itself and its legal documents, including recorded CC&Rs.
• The share of units with FHA-insured loans.
• The owner-occupancy percentage.
• Concentration of units held by a single owner.
• Units in arrears on dues.
• Reserves.
• Commercial or non-residential space.
• Annual dues and special assessments.

Some of these have caps. There is a limit on the share of FHA loans in a building. For single-unit approval, HUD counts all FHA-insured loans in the project, not just single-unit ones. The regulation also allows commercial or non-residential space within a permitted range of 25 to 55 percent of floor area, with HUD setting the specific figure by notice. Exact current limits can change, so your lender will check them against the current Handbook.

A Financial Distress Event, such as bankruptcy or receivership of the project or its builder, triggers extra paperwork. HUD’s Form 9992 questionnaire asks about the prior 36 months. If the project had one, the file needs dated legal evidence that it was resolved. A leasehold interest triggers its own documentation too.

Condo-specific flood insurance rules also apply. If any part of the project is in a Special Flood Hazard Area, flood insurance must be obtained, per HUD Mortgagee Letter 2025-17.

Where does this show up for you? Mostly in what you ask before offering. Which brings us to the checklist.

Questions to Ask Before You Offer

Ask your agent, the seller or the management company:

• Is the building on the HUD approved list, and what is its status?
• Has the association had a lawsuit, bankruptcy or receivership?
• What percentage of units are owner-occupied?
• Are many owners behind on dues?
• What do the reserves look like, and is a special assessment planned?
• Is there commercial space in the building?
• Is the building complete, with at least five units?
• How fast does the management company respond to document requests?

A seller who can’t answer most of these is telling you something about the building.

How HOA Dues Change What You Can Afford

Association dues count. They are collected in the project review and they bear on affordability, because dues are part of your monthly housing cost.

Here’s a way to picture it without dollar figures. Take two units at the same price, with the same down payment percentage. One building has modest dues and one has heavy dues. The heavy-dues buyer has less room under the housing ratio, which starts at 31 percent on the base pair. The same borrower can clear the ratio on one and miss it on the other.

Special assessments work the same way. A planned one can change both the building review and your budget. Ask for dues and any assessments in writing before you write an offer, and let your loan officer run the ratios with them included.

Mortgage insurance is also part of the monthly picture. On a thirty-year loan above 90 percent LTV, the annual premium lasts for the term. At or below 90 percent it ends after eleven years. Because FHA purchases often sit near the top of the leverage range, most condo buyers should plan for the longer schedule.

If the Building Isn’t Approved

Take it one step at a time.

1. Check for single-unit approval. If the building has five or more units, is complete, and isn’t a manufactured home project, the lender can try the single-unit route. Concentration limits still apply.

2. Look at other buildings. Sometimes the right move is a different address, especially if the building has litigation or heavy investor ownership.

3. Consider other loan types. Conventional and VA each use their own project-review frameworks, which differ from FHA’s. Lendmire’s piece VA Loan Condo Approval Rules for a Veteran Buying a Primary Home covers one of those paths.

4. Wait. If the building’s issue is fixable, such as a resolved lawsuit or an association working toward approval, timing may change the answer. Full project approval is the association’s job, done through Form HUD-9992 with governing documents, budget and financials.

Resale matters here too. Unit marketability can depend on the project’s FHA status, and HUD names marketability as a review factor. A building that FHA buyers can’t use has a smaller pool of buyers when you sell.

FHA or Conventional for a Condo?

It depends on your file and on the building.

The honest flip point: if the building fails FHA review but meets another program’s standards, the other program wins. And if you have strong credit and a large down payment, the mortgage insurance structure may favor conventional. Lendmire’s article FHA Loan Guidelines for Buying a Condo as a Primary Home goes deeper on the FHA side.

Key Terms Defined

Approved condominium project: a building that meets FHA’s project approval requirements and appears on HUD’s list with an “Approved” status.

Single-Unit Approval (SUA): a lender-level review that lets FHA insure a loan on one unit in a project that is not approved.

Form HUD-9991: the questionnaire the lender completes about the association, reserves, occupancy mix and dues.

Financial Distress Event: HUD’s term for events such as bankruptcy or receivership of a project or its builder.

Owner-occupied unit: a unit whose owner lived in it for part of the year and did not rent it out for most of the year.

Upfront mortgage insurance premium: a 1.75% charge on the base loan that FHA programs add, and that can be financed.

Next Steps

If you are buying a home and want to see whether an FHA loan fits your file, Lendmire can help you compare the options and what each one asks of the file. Consumer mortgage lending is available in 16 states, subject to lender guidelines and full file review, and nothing here is a commitment to lend.

For your own numbers, request a scenario review with Lendmire.

About Lendmire

Lendmire (NMLS# 2371349) is a mortgage brokerage serving homeowners and home buyers in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. HUD – FHA Condominiums

2. HUD

3. HUD’s field descriptions

4. Federal Register – Project Approval for Single-Family Condominiums

5. HUD Mortgagee Letter 2025-17