FAQ’s – About VA & FHA Condo Approval in 2022

Below is a list of our most Frequently Asked Questions (FAQ’s) about the VA and FHA Condo 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.

  1. 1
    What is FHA Approval for Condominiums?

    FHA Condo Approval is the method used by HUD to ensure that Condominium Complexes are financially stable and well managed.  HUD uses the certification process as a risk management tool to reduce the probability of foreclosures on FHA insured loans on condominiums.

  2. 2
    Why do condos need FHA Approval?

    To buy a condominium with an FHA loan, the entire condo must be approved by HUD. FHA financing is much easier to qualify for than a traditional mortgage because the guidelines are more flexible. A downpayment of just 3.5% is required, much less than conventional mortgages require.

  3. 3
    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.

    For a Condo to become VA Approved, it must meet a special set of guidelines. These guidelines are somewhat different from FHA.

    VA approval does not expire, so no re-certification is necessary. For more information on getting VA approved, you can see here.

  4. 4
    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 with 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.

  5. 5
    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 Association documents. Click here to get started

  6. 6
    Is your company Nationwide?

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

  7. 7
    How long does the entire FHA and VA Approval process take?

    The FHA and VA condo approval process typically takes anywhere from 14 – 30 days; however, this timeframe is completely dependent on each project and their particular situation.

    If the property management company turns over the documents quickly, and the community meets all eligibility guidelines, the process can take as little as 2-3 weeks.

    If the property management company takes a long time to gather the documents, and there are issues that need to be cleared up, it can take significantly longer.

    The average turn around time from start to finish is 30 days or less. But we cannot estimate a timeframe until we have completed our initial review.  Some communities are simply not eligible and do not qualify for FHA or VA at all.

    Click here to review the entire FHA and VA Condo Approval Process.

  8. 8
    Does the size of the community affect FHA and VA Approval?

    The FHA and VA will treat all Condominiums above (4) units pretty much the same.  A (5) unit condo and a (500) unit condo will need to comply with the same set of FHA guidelines with few exceptions.

    For FHA – A Condo with 2-4 units does not need to maintain the same accounting documents (balance sheet, income statement, budget, year-end report) provided each unit owner signs a “Memorandum of Understanding” which is filed with the county.  We have assisted many communities with this in MA, NJ and CA where small condos are popular.

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

  9. 9
    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.

  10. 10
    What documents are required for VA Condo Approval?

    For VA Condo Approval, you will need to provide us with several documents.  Click here to see the full list.

  11. 11
    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 another interested party to pay for the submission if they have a vested interest in the approval.

    Think of it this way – as a homeowner you can attend a Condo Board Meeting and ask them to plant flowers in the front entryway.  They are not obligated to do so, but since both flowers and FHA approval will benefit the entire community, most HOAs will oblige.

  12. 12
    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 without FHA Approval, chances are your Resident will need to lower their purchase price to attract buyers.  The lower purchase price will negatively 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.  If the Board does not wish to pay for the approval, that homeowner can pay for it themselves as an alternative option.

  13. 13
    Do condos have to be FHA Approved?

    No, it is not required for condominiums to become FHA Approved.  FHA Approval is a privilege, not a requirement.

    Condominiums should at least attempt to gain FHA Approval to increase property values for its owners. But this is not mandatory.

    Many communities will not qualify.  See the list of Pros, cons, and misconceptions for more information on why every community should attempt to gain FHA Approval.

  14. 14
    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 or deciding not to cooperate with the FHA or VA Certification process initiated by a homeowner, the Board is now becoming the decision maker on how owners can finance their units. Many see this as an overstep of power.

    Hindering the process has resulted in litigation and many disgruntled owners who wish to get the maximum value for their condos, or perform a refi or reverse mortgage.

  15. 15
    Will the FHA Certification expire?

    Yes.  Condo communities will need to re-certify for FHA approval every three years.

  16. 16
    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 3 years).

  17. 17
    Does FHA do Spot Approvals?

    No, “Spot Approvals” for condominiums were eliminated after the new FHA guidelines came out in 2011.  There is a new “Single Unit” approval process in place:

    Single Unit Approvals

    On 10/15/2019 HUD officially implemented the Single Unit Approval process we’ve all been waiting for.  While many industry insiders released press releases and articles praising the new program, it’s not nearly as simple or as easy as people hoped.  Our team is fielding multiple phone calls and emails daily regarding the process.

    To help clear up the situation, this is what you need to know:

    • The new FHA “Single Unit” Approval program was implemented on 10/15/2019.
    • This is an entirely new program – and NOT the “Spot Approval” program favored by lenders in the past.
    • The SUA program will allow individual units to obtain FHA Loans without full project approval.  This includes forward mortgages, refinances, and reverse mortgages.
    • The SUA process must be handled by a lender that employs Direct Endorsement Underwriters.  Condominium Associations, Realtors, and Lenders without DE Underwriters are NOT allowed to apply directly for a SUA.
    • The Condominium Association MUST still meet ALL eligibility requirements set forth for a Full Project Approval.
    • At this time there is no subset of criteria that makes qualifying for an SUA easier than qualifying for a Full Project Approval.
    • The Management Company/Board of Directors must complete a questionnaire and supply necessary documents.  This process cannot be completed without participation from either the Management Company and/or Board of Directors.
    • Upon receiving conditional approval from HUD, the participating lender is required to confirm that the association qualifies for Single Unit Approval before issuing the loan.
    • Although most SUA case files are currently being reviewed HUD, the future liability and burden of responsibility remains with the authorizing lender.  For this reason alone, most lenders do not participate in the Single Unit approval process.


    Simply put, the Single Unit Approval process is hardly a shortcut.  While in some cases obtaining an SUA may feel like way to go.  In reality it is rarely “Easier” and the guidelines are not any “Less Strict” than when obtaining Full Project approval. In fact, there are more guidelines to adhere to when using the Single Unit approval process.

    Also, it is important to know that there is no streamlined process for obtaining a SUA for additional units in the same community.  The entire process must be repeated with a complete set of documents and a new questionnaire.

    SUA Basic Requirements:

    NOTE:  The Condominium Project must also meet ALL standard eligibility requirements.  The list below are specific nuances to the SUA process.

    • Condominium Project contains a minimum of five units
    • Manufactured homes are not eligible.
    • 10 units +:  maximum FHA Concentration rate of 10%
    • Less than 10 units: maximum of (2) units may be FHA Insured.
    • Commercial Space:  maximum 35% (no exceptions)
    • Owner Occupancy:  minimum of 50% owner occupied (no exceptions)
    • Condominium Project is not currently “Approved” or been previously rejected for an adverse determination.
    • Condominium Project meets all FHA Property Standards.


    Benefits of Full Project Certification:

    • The entire Condominium Association is FHA Approved for (3) years.
    • There is a “Streamlined” Renewal process
    • Community Managers will only need to visit the issue once every (3) years. With the SUA process, it is likely to be a constant and repetitive time burden.
    • Units within Condominium Projects with Full Project Approval can be marketed as “FHA Approved”.
    • HUD authorizes the Approval and the lender does not have to take on unnecessary liabilities.


    How we can help with the Single Unit Approval Process:

      • As a professional service to lenders, banks, mortgage companies, and brokers, FHA Review is offering an FHA Single-Unit Approval Report.  This custom report will allow lenders to prequalify a unit before going through the appraisal, and inspection processes.
      • This report is very similar to our Full Project Eligibilty review, and we ultimately recommend applying for the Full Project approval, as we can see no benefit to a lender, realtor, community manager, or condominium resident to utilize the SUA process.

  18. 18
    Is it hard to get a condo FHA Approved?

    No, the process is easy if you use a 3rd party service like FHA Review.  As long as a condominium meets the FHA guidelines, it is not hard to do.

  19. 19
    What does FHA Concentration mean?

    FHA Concentration is the amount of FHA Loans currently present within a condominium association.  The FHA will allow up to 50% of the units within a condominium community to be FHA financed.  There are also exceptions to this rule which are dictated by HUD.

  20. 20
    Do FHA loans have to be owner occupied?

    Yes.  The FHA Loan rules state the borrower applying for a new purchase condominium must use that residence as the “primary residence”.  Some extenuating circumstances may permit an FHA purchase as a 2nd home, but they are very limited.

  21. 21
    Does a Townhouse need to be FHA Approved?

    That depends.  A townhouse is a style of unit – like a bungalow or a cottage.  If the legal description of the townhouse is a condominium then yes, it will need FHA Approval.  The best way to find out is to read your governing documents.  If you see the word “condominium” anywhere in the Declarations it will need FHA Approval.

    FHA Approval is NOT required if the townhouse is in a PUD (Planned Unit Development).

  22. 22
    Does a PUD (Planned Unit Development) need FHA or VA Approval?

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

  23. 23
    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.

  24. 24
    Do detached condominiums need to be FHA Approved?

    Maybe.  If your detached condominium qualifies as a “Site Condominium,” then no, it will not need FHA Approval.  If the condominium does not meet all the criteria of a Site Condominium, then YES you will need FHA Condo Approval.

    Here are the criteria for Site Condo:

    • 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.

  25. 25
    Is FHA Condo Approval new?

    The FHA condo approval process is not new; however, it has changed considerably since 2011.  Prior to the changes at that time, a Condominium Complex only had to become certified once – and the certification never expired.

    After 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 October of 2019.

  26. 26
    The HUD Site shows FHA Condo Approval is Expired. What are my options?

    FHA certification expires every 2 years, so this is a common issue.  Many smaller communities let their certification expire until another FHA transaction arises.  If you would like to get the certification reinstated, we can help.  Just click here to get started with the process.