Florida Condo Association/Project Mortgage Financing FAQ’s

Is FHA financing available to purchase a condo?

Currently and generally the answer is no.  HUD is currently in the process of adopting rules to allow for easier FHA condo financing but those new rules are not yet available. In the meantime, you can check HUD’s Condo Look to best determine if the condo project is approved. Please be aware the status must reflect approved and it is not expired. Many status approved projects have expired.  In order to get a condo project approved the association must participate in a rather complicated process that most association’s find too cumbersome. 

What is the minimum downpayment for a condo considering FHA is probably not an option?

FHA requires 3.5% minimum downpayment while conventional financing can be offered as low as only 3%. 

Does the condo association need to be approved for conventional financing?

The short answer is sort of.  In general, there’s no master list of approved condo projects for conventional financing. However, Fannie Mae does publish a PERS List of approved condo projects that are typically condo projects that are newly constructed. Unlike FHA the absence of being on this list doesn’t mean the condo project is not eligible for financing. Absent being on the PERS List a lender would need to review a condo project to determine if the condo project meets acceptable minimum standards for Fannie Mae and/or Freddie Mac financing options.  Lenders are required to maintain a list of condo projects that have been identified as failing to meet the acceptable condo project standards. 

Does the condo association have to have reserves for Fannie Mae and/or Freddie Mac financing?

If the condo association does not have either a 10% reserve allocation in their annual adopted budget or an independent 3^rdparty produced reserve study that indicates that 10% is not necessary then Fannie Mae and/or Freddie Mac financing options would not provide for 3% downpayment options.  However, in many cases we are able to offer 10% downpayment options.

Is conventional financing available for condo projects that have a very high number of rentals?

Provided you’re purchasing as an owner occupancy (primary or secondary) the condo project’s number of rental units is totally irrelevant. In fact, the condo project could have 99% tenant occupants and conventional financing may be offered with as little as 3% downpayment. 

How can I best determine if a condo project is going to be approved before I invest in time to look at the property and/or spend money on inspections and/or appraisals?

Simple answer – CALL US 954-359-3000.  Typically, we can research most any Florida condo project and provide a quick answer based upon our review of recent prior sales.