If you’re thinking about purchasing a condominium, you may be wondering if you can use an FHA loan. The most simple answer is that many (but not all) condo communities are eligible to be financed with a FHA loan. Because the FHA has specific requirements for condo projects, the community must already be on FHA’s list of approved condominium projects in order to obtain an FHA loan.
Huntingdon Place Condo Community
If the condo community is eligible for an FHA loan, there are several advantages to using this FHA loan to purchase a condo! First, an FHA loan allows you to make a down payment as low as 3.5% whereas a conventional loan requires a minimum of 5% down. Additionally, an FHA loan allows a larger seller’s assist, which helps many buyers afford closing costs more easily.
Another major advantage is a lower interest rate. Loans won’t increase your interest rate simply because the property is a condo, while a conventional loan is likely to raise the rate for this reason.
The biggest advantage, however, may come when it is time to sell the condominium. Owning an FHA-approved condominium is a major advantage because FHA make up a large percentage of the market share. As a result, if the condo is not approved by FHA, it can make them more difficult to sell.
Interested in buying a condo with an FHA loan? Consider reaching out to Mark Mawby at mark.mawby@freedommortgage.com or your EveryHome agent for more information and a list of FHA-approved communities.