Condo Loans

Condo Loans Guidelines FHA, VA, USDA, Fannie & Freddie

Condo Loans are used to purchase Condominiums.  Condominiums are individually owned units that share commonly owned structures.  The owner is responsible for the individual unit and the condo association owns and maintains the common areas.  A condo can be an apartment home, a town home, or a single family home that are part of a condo association.  The condo is the type of ownership where as the apartment, town home, or single family is the style of home.  The type of mortgage financing available for the purchase of a condo are the following:

The individual condo owner will be responsible for paying a condo fee to the association on a monthly or yearly basis depending on the condominium association by-laws.  Sometimes the condo fee is also referred to as a homeowners association fee or HOA for short.  Some Condos may have both a condo fee and a HOA fee that are paid by the owner.  The condo or HOA fee are paid for the following services:

  • Maintenance of the exterior of the home which includes landscaping and snow removal
  • Insurance policy that covers the exterior and the structure of the home
  • Use of common areas such as pools, recreation rooms, play grounds, and other common areas

The owner is still responsible to purchase an in walls insurance policy called an H-9 policy that covers personal items and interior structures


FHA Condo Loans

FHA Condo Loan Guidelines:

To find out if a condominium project is HUD approved for FHA Loans visit:

FHA Condo Loan

FHA Loan Condo Eligibility for Existing Condominiums

  • 50% Owner Occupied
  • No spot loans
  • No person or entity can own more than 10% of total units
  • No more than 50% can have FHA loans – 100% exception possible thru HOC if: 1) Project 100% complete 2) 100% of units sold 3)10% reserve in project budget 4) HOA controlled by owners
  • Review of HOA Budget & Insurance Coverage for adequacy
  • Existing Condo Projects must be recertified by 12/1/10 or project will be dropped from approved list.
  • Special Rules for 203K Condo Loans
  • No more than 4 units per building
  • 50% owner-occupied
  • Funds used for interior only
  • 100% LTV after improved (inc. MIP)

VA Condo Loan Guidelines:

To See if a Condo is approved for VA Loans visit:

VA Condo Eligibility for Existing & New Condominiums

  • 51% Owner Occupied
  • No spot loans
  • No person or entity can own more than 10% of total units
  • VA Does NOT accept FHA approval

USDA Condo Loan Guidelines:

If condo project is approved by either Fannie Mae OR Freddie Mac OR FHA OR VA, then USDA will lend on condo

Fannie Mae Condo Loan Guidelines:

To see if Condo Approved by Fannie Mae:

Fannie Mae Condo Eligibility for Existing Condominiums

  • 50% Owner-Occupied or Second Home if Subject is investment only (change date October 2014)
  • No single entity may own more than 10% of total units
  • At least 90% total units in project conveyed to the unit purchasers
  • 100% complete
  • No additional phasing or annexation
  • HOA in control
  • Manufactured Homes require special Fannie approval
  • 10% of Operating Budget in Reserves
  • No more than 15% HOA delinquency
  • Project must be demonstrably well managed
  • No more than 25% commercial use (change date November 2014)

If you would like more information on a Condo Loan to purchase or refinance a condominium in Delaware, Maryland, PA, New Jersey, or Virigina, please call our office at 302-703-0727 or apply online at Condo Loan Application

John R. Thomas NMLS# 38783

Certified Condo Loan Specialist

Primary Residential Mortgage, Inc.

248 E Chestnut Hill Rd, Newark, DE 19713

302-703-0727 Office