FAQ’s | About FHA Condo Approval 2017


Below is a list of our most Frequently Asked Questions (FAQ’s) about the VA and FHA approval process, board involvement, the costs, and more. If you have additional questions, send us an email through our contact us form, and we’ll be sure to answer you.


What is an FHA approved condo?

If you are approved for an FHA loan, and want to buy a condominium, the entire condominium complex must be approved by the FHA. In order for a condominium complex to become FHA approved, it must meet a strict set of guidelines determined by HUD. This includes being at least 50% owner occupied, but thats just the tip of the iceberg. The condo complex must also meet many other standards – including financial stability, insurance requirements, reserve funding, leasing specifications and much more. FHA approval expires after 2 years, and all condominiums must re-certify at that time to maintain approval. For a list of basic requirements to become an FHA approved condominium, see here.


What is a VA approved condo?

If you are a veteran or active duty military personnel, you may be eligible for VA loan benefits. However, if you want to buy a condominium, the entire condominium complex must be approved by the VA. In order for a condominium complex to become VA approved, it must meet a special set of guidelines. These guidelines are different from those set forth by the FHA. VA approval does not expire at this time, so no re-certification is necessary. For more information on getting VA approved, you can see here.


Is my community FHA or VA Approved?

 You can check status here.

From the above web address, you can link directly to the HUD or the VA website. Both of these sites are updated daily and have current information. When searching for FHA, it is advised to only enter the State and zip code. Searching the VA site is trickier and it is suggested to only search with the State field selected. When searching VA, remember to also search the property legal description.


How do we become FHA or VA Approved?

 FHA Review is a third-party submission service. We specialize in both FHA and VA approval processes. To begin the process we simply need a completed one-page questionnaire and some associated documents. Contact us directly for the “Step 1” questionnaire. (natalie@fhareview.com)


Is your company Nationwide?

Yes.  We can gain FHA or VA approval in all 50 states, Guam, Virgin Islands, and Puerto Rico.


How long does the entire FHA approval process take?

The FHA condo approval process typically takes anywhere from 30 – 60 days, however this timeframe is completely dependent on each project and their particular situation. Click here to review the entire FHA Condo Approval Process.


Does the size of the community affect the approval time?

NO.  Even a small 2 unit condominium will take 30-60 days for approval.  There is no preferential treatment given by the FHA to smaller communities.


What documents are required for FHA Condo Approval?

for FHA Condo Approval, you will need to provide us with several documents.  Click here to see the full list.[/pane]


How much does FHA Condo Approval cost?

The cost is anywhere from $765 – $850. This fee includes all condo plans, annexations, supplemental CC&Rs, and tract maps. Many other submission services do not include these documents in their service, and the time and expense of getting these items is left up to the Board or Manager.


Who is responsible for paying for this?

 The Association is not legally obligated to pay for the Certifications. However, many Associations will cover the cost because it benefits the entire community. It is also common for a Homeowner, Realtor, Lender, or other interested party to pay for the submission if they have a vested interest in the approval.


Does FHA or VA Certification require Board Approval?

No. The Board does not need to approve the process. However, issues may arise that require Board assistance.   It could be something as simple as a signature. All current owners have the legal right to request all the documents required by the FHA to obtain certification.   The current thought held by most industry professionals is that FHA and VA Certification is a huge benefit to any Condominium project. Boards that refuse to allow approval are now taking it upon themselves to determine the financing options available to the owners.


My HOA has a resident asking the Board to get FHA condo approval – why should the Board pay for this if it only benefits one homeowner?

FHA Certification benefits the entire community, even if there is only one unit up for sale.  Since the buying pool is severely limited, chances are your Resident will need to lower their purchase price to attract buyers.  The lower overall purchase price will affect the value of all units in your community.  Keep in mind that residents who want to utilize a reverse mortgage or refinance their homes using FHA will also benefit from FHA approval.


What is FHA Certification for Condominiums?

FHA Certification is the method used by HUD (the Department of Housing and Urban Development) to ensure that Condominium Complexes meet detailed criteria to ensure that they are financially stable and managed properly.  HUD uses the certification process as a risk management tool to reduce the probability of foreclosures on FHA insured loans on condominiums.  This new “FHA Approval Process” is a detailed review of the Condominium Projects legal documents, financials, and overall health of the community.


Is this new?

The FHA condo approval process is not new, however it has changed considerably over the past five years.  Prior to the changes, a Condominium Complex only had to become certified once – and the certification never expired.  As an effect of the mortgage crisis, HUD required the FHA to give all condominium complexes expiration dates and develop a new set of guidelines.  The most recent set of guidelines went into effect August of 2011, and the last set of expiration dates was September 30, 2011.


Is the Association legally obligated to become FHA or VA Certified?

No. Currently there is no legal requirement for a Board of Directors to seek FHA or VA Certification for their condo project, but it does fall within the fiduciary duty of Board to at least consider it. By ignoring the issue or deciding not to cooperate with the FHA or VA Certification process, the Board is now becoming the decision maker on how owners can finance their units. This is seen by many as an overstep of power, and has resulted in litigation and many disgruntled owners. Boards should be very wary of standing in the way of FHA and VA Certifications.


Can we use a “Spot Approval” instead of full certification?

As you are aware, there have been changes in the world of FHA financing, and it is affecting Condo Communities everywhere.  Prior to 2011, communities were either already FHA condo approved (by the developer) or could be purchased using a “FHA Spot Approval”.   The “Spot Approval” process has since been eliminated, and all Condos were given expiration dates for their FHA condo approval.  Many HOA Boards and Property Managers are frustrated by these recent changes and have many questions regarding FHA condo approval.


Will the FHA Certification expire?

Yes.  Condo communities will need to re-certify for FHA approval every two years.  There is currently no difference in the “re-certification” process, however in the future the FHA is planning to streamline it.


Why weren’t we notified of the expiration date?

The expiration dates were published on HUD website.  HUD does not have a notification system in place.  At fhareview.com we notify all our customers when renewal is required (every 2 years).


Does a PUD (Planned Unit Development) need FHA approval?

No, Only Condominiums need FHA approval.  In general, if your Declarations or CC&R’s use the word “Condominium” you will need FHA approval.


Do Site Condominiums need FHA Approval?

No.  Site condominiums do NOT need FHA approval.  Site condominiums meet the following criteria:

  • Single family totally detached dwellings (no shared garages or any other attached buildings or e.g. archways, breezeways); and 
  • Are encumbered by a declaration of condominium covenants or condominium form of ownership; and 
  • The condominium unit consists of the entire structure as well as the site and air space and are not considered to be common areas or limited common areas; and 
  • Insurance and maintenance costs are totally the responsibility of the unit owner; and 
  • Any common assessments collected will be for amenities outside of the footprint of the individual site.

Read Pros and Cons of FHA Condo Approval >>>

Feel free to contact us for additional information regarding FHA condo approval or the submission process.