An FHA loan on a condo requires the building to be on HUD's approved list, or the unit to qualify for single-unit approval. FHA takes 3.5% down, and the whole down payment can be a gift from family. This guide covers the project rules, how to check HUD's list, and what to do if the building is not approved.
How FHA condo approval works
On a conventional loan, the lender reviews the condo project during underwriting. FHA requires the entire condo project to be pre-approved or to qualify for a single-unit approval. Condo approval is a separate process from your individual loan approval.
In DC, the 2026 FHA loan limit for a one-unit property is $1,249,125 (HUD No. 25-145), so an FHA loan can finance a DC condo up to that loan amount.
FHA project approval
The condo's HOA applies for FHA approval, which covers the entire building. Once approved, any buyer can use an FHA loan to purchase a unit in that project. Approvals are valid for 3 years before renewal is required.
FHA single-unit approval
Since 2019, FHA also allows "single-unit approvals" for individual units in buildings that don't have full project approval, with the additional requirements listed below.
FHA condo project approval requirements
For full project approval, the building must meet these criteria:
- Owner-occupancy: At least 50% of units must be owner-occupied
- FHA concentration: No more than 50% of units can have FHA-insured mortgages (this cap can be waived in some cases)
- Commercial space: No more than 35% of floor area can be non-residential
- HOA finances: Budget must include at least 10% allocated to reserves
- Insurance: Adequate fidelity, hazard, liability, and flood coverage
- No litigation: No active litigation that could affect the project's financial stability
- Delinquencies: No more than 15% of units can be 60+ days delinquent on dues
- Restrictions on conveyance: No right of first refusal or transfer restriction that violates fair-housing law (HUD 4000.1 II.A.8.p)
FHA single-unit approval requirements
If the building doesn't have full FHA approval, individual units may still qualify if:
- The project is complete and not a manufactured home condo
- The unit is in a project with at least 5 units
- Owner-occupancy is at least 50%
- No more than 10% of the units already carry FHA loans (no more than two units in a building of 5–9 units)
- No more than 35% commercial space
- The project is not a condo-hotel or houseboat
- The HOA is not named in any litigation that affects safety, soundness, or habitability
How to check whether a DC condo is FHA-approved
Before making an offer, check whether the condo is FHA-approved:
- Visit HUD's Condominium lookup
- Search by state, city, and project name or FHA ID
- Verify the approval hasn't expired (check the expiration date)
If the building shows as "Approved" with a current expiration date, the building qualifies for FHA financing.
What to do if the building is not FHA-approved
Ask the HOA to apply for FHA project approval
The HOA can apply for FHA approval. HUD review takes weeks. The application requires submitting financials, CC&Rs, insurance certificates, and other documentation. An HOA may agree to apply when a buyer asks, since approval opens FHA financing to every unit in the building.
Apply for single-unit approval
Your lender can process a single-unit approval as part of your loan application. Single-unit approval adds time to the process but doesn't require the HOA's cooperation beyond providing standard documentation.
Use a conventional loan
A conventional loan uses the lender's own project review instead of FHA's list, with different criteria that a building can meet even when it is not on HUD's list. Conventional needs a higher credit score than FHA; the minimum down payment can be lower (3% for eligible first-time buyers vs FHA's 3.5%).
Search only FHA-approved buildings
If you need FHA financing, limit your search to buildings on HUD's list.
How a condo building loses FHA approval
A building can lose FHA approval if:
- Owner-occupancy drops below 50% — as investors buy units
- Approval expires and the HOA doesn't renew — renewal requires submitting updated documentation every 3 years
- Litigation is filed against the HOA — construction defect lawsuits in particular
- Financial health deteriorates — insufficient reserves or high delinquency rates
How FHA approval affects condo resale
FHA approval status also affects who can buy your unit when you sell:
- FHA-approved buildings have a larger pool of potential buyers (including first-time buyers with lower down payments)
- Buildings that lose FHA approval lose those buyers, which puts downward pressure on price
Steps for FHA condo buyers
- Check approval before you tour — if you are using an FHA loan, search only FHA-approved buildings
- Ask your real estate agent to filter listings by FHA approval status
- Build extra time into your timeline — if single-unit approval is needed, add time for HUD's single-unit review; ask your loan officer for the current turn time
- Work with a loan officer who has closed FHA condo loans in DC — the single-unit approval package needs the HOA's financials and insurance certificates, so request them from the HOA early
- Have a backup plan — confirm you also qualify for a conventional loan in case FHA approval falls through
Get pre-qualified or book a 15-minute call to check a specific DC building.