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FHA: “Condo Complexes No Longer Have to Be FHA Approved” – Spot Approvals Return!


About ten years ago “FHA Spot Approvals” went the way of the dodo bird, in that they disappeared.

This was devastating to a lot of FHA buyers b/c condos were all that they could afford in their markets and so many condo complexes are NOT FHA approved.

Fortunately, however, HUD/FHA will again allow for “Spot Approvals” as of October 15th.

A “Spot Approval” is the approval for FHA financing for just a single unit within a condo complex that is NOT formally FHA approved.

This is a huge boon for the condo market and FHA buyers in general simply b/c so many condo complexes are not FHA approved.

To be eligible for a Spot Approval, the unit’s complex still needs to have a strong HOA with ample reserves, an owner-occupancy ratio of 50% or more, and no concentration issues (with one investor owning more than 10% of the units), among other things.

No more than 10% of the units within a complex can obtain “Spot Approvals” if the complex has ten or more units. And no more than two units can obtain “Spot Approvals” if the complex has fewer than ten units.

Anyway, all of us need to let our FHA-approved buyers that the condo market just opened up for them.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167

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