Most people just assume that all properties are acceptable for FHA financing as long as the price limits/restrictions are met. The truth of that matter is that condominiums as well as site condos have to be pre-approved as an acceptable property for FHA financing or the property does not qualify for an FHA loan.

The mortgage company/bank/financing institution can do a “spot approval” if the property has not been previously approved for an FHA loan. There are certain criteria that have to be met for the property to qualify for this “spot approval”. Since it is a government insured loan, you can imagine that the “I”s need to be dotted and the “T”s need to be crossed. In many cases the spot approvals are successful; but, there are cases when the spot approvals are denied.

If you are considering purchasing a site condo or an attached/detached condo, it is best to check with your financing institution to make sure that the complexes and/or subdivisions that you are interested in have either previously been approved for FHA financing or would be eligible for a spot approval on one of the units in the complex/subdivision.

The more homework that you do in the beginning of your property search, the better prepared you will be to deal with your future purchase. Your real estate agent can also help in getting a list of the approved condominiums for FHA financing.