FHA Approval is a designation given to a condominium by HUD allowing unit owners within that condo the ability to obtain an FHA insured mortgage. 

To obtain FHA approval you must submit all required information and documentation to the HUD Jurisdictional Home Ownership Center (HOC) for your state. The requirements for FHA Approval are periodically updated and published via HUD Mortgagee Letters. Click here for a list of Jurisdictional HOC's.

The FHA approval process varies greatly and is very dependent on the construction status of the development and the ability of the condo association to provide the required documentation. Once the documentation is assembled and the package is submitted to the Jurisdictional HOC for consideration, HUD asks for up to 10 days to  confirm receipt of the submission. From that point they ask for up to 30 days to review the submission and render a decision. If a condo is not approved during it' s initial submission and additional documents are requested, the condo goes to the back of the queue - the time frame is reset - and up to an additional 40 days is added to the approval process.

FHA Approval is important because not only does it signify that your condominium is a Financially Healthy Association and Equitable to unit owners, it allows you to take full advantage of the benefits of FHA insured mortgages. 

FHA approval benefits include: 

• A designation as a Financially Healthy Association;  

• Lower minimum down payments and credit qualifying requirements than conventional mortgage products; 

• The ability to fund a reverse mortgage;  

• FHA loans are the only loan type that is fully assumable;  

• Access to a larger buyer pool which means more offers and potentially a higher sale price than a comparable condo unit in an association that is not FHA approved; and  </s

To find out if your condo is approved go to HUD's roster of FHA Approved Condominium Projects and search using one of the available search methods. You will have to know the name of the condo association in most cases to identify if it is FHA Approved.

Historically FHA's market share has been in the neighborhood of 2% but as of the 2nd quarter of 2012 31.5% of Purchases and 7.6% of Refinance loans were backed by FHA insured mortgages. Today 80 percent of first-time home buyers rely on FHA insured mortgages.

There is a common misunderstanding in terms when it comes to FHA loans as the FHA does not actually issue the loan. An FHA loan is a mortgage that is funded by the same lenders that fund conventional home loans. However an FHA loan is Insured by the Federal Housing Administration so in the event that the borrower defaults on the loan, the lender does not take a complete loss. This incentivizes HUD approved lenders to provide affordable financing to borrowers with smaller down payments and lower FICO scores.  

It is important to note as well that historically FHA insured mortgages have a lower default rate than conventional mortgages.  This is in part due to the fact that although FHA allows smaller down payments and lower FICO scores, FHA insured loans are a "full doc" mortgage product. This means that the borrow must provide full financial documentation including bank statements and income verification. Conversely some conventional loan products allow a borrower to simply state their income. 

Per the guidelines released in HUD's ML 11-22 Dated June 30, 2011 Eligible Submission Sources for the HUD Review and Approval Process (HRAP) are: 

• Builder; 

•  Developer;  

• Homeowner’s Association (HOA);  

• Management Company (MC);  

• Project Consultant; or  

• Attorney acting as an agent for the developer/builder, HOA or MC 

FHA Approval is good for 2 years at which time the association will need to re-certify to maintain their approved status. To recertify the approval the condo must submit documentation showing they are still operating within HUD's FHA Approval guidelines. A condo may loose it's FHA Approved status if - during the coarse of an owner / buyer funding a loan within the association - it is discovered that the association no longer meets one or more of the approval requirements.

Yes, to obtain reverse mortgage within a condominium, the development must first be FHA Approved. The only reverse mortgage insured by the U.S. Federal Government is called a Home Equity Conversion Mortgage or HECM, and is only available through an FHA approved lender. 

An FHA loan can be obtained by any HUD approved mortgage lender. A HUD approved lender can be found using HUD's Lender Locator. You can also use online search engines such as Google and Yahoo or contact your local - or the National - Association of Mortgage Brokers

NO. Both programs are instituted by HUD but they are completely separate and have no bearing on one another. FHA is a mortgage insurance program for purchase and refinance loans and is available home buyers/ owners. Section 8 is a Housing Choice Voucher Program available to low income families when renting or leasing a home.

FHA's minimum down payment requirement is 3.5% of the purchase price of a home. This does not mean you can only put down 3.5%. The borrower can put down more than the minimum but there is no obligation to do so.

Additionally in certain states there are programs that are available to home buyers - including FHA borrowers that will give the borrower up to 3% of the down payment. This means that if the borrower qualifies for one of these programs they only have to put down .5% or the purchase price. That is a $500 down payment for a purchase amount of $100,000.

An assumable loan is one that does not contain a "Due on sale" clause. This means that there is no obligation for the seller to pay off their loan upon selling their home. Instead they can assume the loan to a qualified buyer. To do this the lender has to agree to the Approval of the new borrower and Release the seller.

The FHA 203k loan is a mortgage program that allows a borrow to obtain a blanket financing that will cover:

• The purchase price of the home
• Upgrades and/or Improvement of the dwelling
• Up to 6 months of mortgage payments

To be eligible for this the borrow must meet all financial and credit requirements associated with a standard FHA insured loan, but additional requirements will apply. Click Here to find out more about 203k Loans.