🏢 THE FHA CONDO SECRET most loan officers never use ⬇️

When a condo isn’t on the FHA approved list, most LOs immediately pivot to conventional. They assume it’s the only path.

It’s not.

FHA allows SINGLE UNIT APPROVAL — meaning you don’t need the entire project approved, just the individual unit your buyer is purchasing.

At Summit Funding Advisors, we close these Single Unit Approvals regularly. A lot of lenders don’t even offer them — and that alone can be the difference between a closed deal and a lost one.

✅ BASIC PROJECT ELIGIBILITY

  • Not currently FHA approved (expired, rejected, or withdrawn is OK)
  • At least 5 units
  • Completed with a certificate of occupancy
  • 50%+ owner occupancy
  • No more than 15% of units delinquent on dues
  • HOA allocating at least 10% to reserves

✅ CONCENTRATION LIMITS

  • Under 20 units → capped at 2 FHA loans
  • 20+ units → capped at 10%
  • No single entity can own too many units

🔑 THE PART ALMOST NOBODY TALKS ABOUT

Your LTV is driven by the underwriting result.

→ Approve/Eligible through AUS: up to 96.5% LTV → Falls to manual underwriting: capped at 90%

Same deal. Same borrower. Different outcome — depending on AUS.

📋 Everything runs through HUD Form 9991, the questionnaire that captures occupancy, financials, insurance, and overall project health.

👉 CLICK HERE FOR HUD 9991 FORM

⚠️ ONE STEP THAT GETS MISSED: when you order the FHA case number, you MUST mark it as Single Unit Approval. If you don’t, you’re creating problems before the file even hits underwriting.

📁 DOCUMENTATION CHECKLIST 

CORE DOCUMENTATION

  • Completed HUD 9991
  • Current HOA budget
  • HOA master insurance policy
  • Condo governing documents (CC&Rs, bylaws)

PROJECT VALIDATION

  • Owner occupancy verification
  • Delinquency data
  • Reserve allocation (minimum 10%)

INSURANCE

  • Hazard insurance
  • Liability coverage
  • Flood insurance (if applicable)
  • Fidelity bond (if required)

💡 WHY THIS MATTERS

You’re already doing this level of review on the conventional side to get the deal done. This isn’t extra work — it’s just a different execution.

And FHA delivers higher LTV, strong rates, and more flexibility… yet almost nobody is quoting it on condos.

Before you move that next condo deal to conventional, pause for a second and ask: Can this go FHA Single Unit Approval?

A lot of times the deal doesn’t need a different product — it just needs a different path. 🔑

📞 Got a condo deal stuck on the FHA list? Send it our way before you pivot.

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