Long-Awaited FHA Condo Rule Goes into Effect Oct. 15

Long-Awaited FHA Condo Rule Goes into Effect Oct. 15

October 2019

On August 14, 2019, the U.S. Department of Housing and Urban Development (HUD) released the long-awaited final rule on project approval for single-family condominiums insured by the Federal Housing Administration (FHA). For many years, NAR urged HUD to finalize changes to the previous rule that would ease restrictions on FHA financing for condominiums, thus enabling more first-time buyers, older adults, and low to moderate-income families to achieve the dream of homeownership. We will continue to work with FHA and Freddie Mac and Fannie Mae to insure that people who wish to purchase a condominium have safe affordable access to mortgage credit. The final rule goes into effect on Oct. 15.

Due to technical difficulties, we were unable to take your questions live on this important issue, but watch the video below and type your questions in the comment section for NAR staff experts to answer.


Check out the resources below to assist you in understanding the FHA Condo Rules and in serving your clients.

 NAR’s Condominium Page

FHA Condominium Rule Assessment

HUD Condo Project Look Up

VA Condo Project Look Up

FHA Single Family Housing Policy Handbook – Condo Project Approval


  1. REPLY
    Tim says

    Can someone send out a short summary of the bullet points for these FHA changes on condos? Trying to get the agents to watch a 20 minute video is tough.

    • REPLY
      Ronald Stebbins says

      I’d like that as well!

  2. REPLY
    Nancy Schmelzer says

    Thanks so much for your hard work on these FHA rule improvements. I am curious about the reserve requirements. I think I heard one of you say it was 20%. 20% of what? What is the formula based on?
    Condo fees, value of building, tax assessments, budget?

  3. REPLY
    Khadija Westermarck says

    Good morning
    Is that immediat?
    I have a contract now can I get it done on the 15th?
    Also what do we do with the associations requiring a 10or 15%down???

  4. REPLY
    Debbie Bates says

    I was so excited to hear it was going to get easier for buyers to get into condos with FHA, but am disappointed to hear there will be a 10% limit on FHA loans within a building that’s not currently FHA approved. There are virtually no FHA approved buildings in South Florida, so to limit the concentration of FHA buyers to 10% isn’t good. I searched the HUD site and looked in the city of Davie for example. There are 22 condos listed. All are either expired or rejected. Not one condo is approved. For the expired condos, many expired way back in the 1990’s. Some expired in 2011. Would all these condos need to start from scratch to get approved? Looked in Fort Lauderdale, which is a bigger city. 65 condos on the HUD site. One condo is approved, but prices are $600k+ which doesn’t work for most 1st time buyers. My excitement has been dampened, learning about the 10% concentration rule on non-approved FHA condos. Hope you’ll continue to fight for this. You mention we should email you – can you provide your email address?

  5. REPLY
    Dave S says

    So with condos they no longer need to be on the FHA approved list? Am I reading this correctly?

  6. REPLY
    Jeffrey Schubot says

    Please email me the “one pages” so I can share them with the HOA’s , sellers and buyers. Thanks.

  7. REPLY
    Corina Backer says

    New condos just build. I have 1st client to buy. Can they buy it FHA with Spot loan?

  8. REPLY
    Mike Swaney says

    There is a very useful link in this post “FHA Single Family Housing Policy Handbook – Condo Project Approval” and the document is over a THOUSAND pages long. Is there a one pager or anything shorter which can be used to understand the process?

  9. REPLY
    George Chace says

    A summary about how this affects old, present, and new condos. No one has the same answers.

  10. REPLY
    Lauren says

    No FHA approved condos in miami. This won’t work here. Please do better. Back to square one.

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