Dana -
One piece of information that might be helpful:
While all that has been written below is accurate, what needs to be added is that many condos are not actually condos. They are PUD's (Planned Unit Developments) or landominiums. If the "condo" is a townhome, often times it's a PUD (which means it owns the small piece of land it sits on). In those cases, the new FHA guidelines don't apply and you can still obtain FHA financing.
A check of the property records will determine if there is a lot number. If there is a lot number, FHA financing can be utilized.
I have one under contract right now that is going FHA. It's a "condo" with an HOA and fees but is a townhome with its own lot number (even though the units are attached). We are closing 11/20/09 with FHA financing.
In the Northern KY and Greater Cincinnati area, there are a good number of these types of developments out there.
Regards,
Rainey DeLotell
RE/MAX Affiliates

The Federal Housing Administration is getting ready to implement new rules that could, in some cases, make it harder to get a mortgage to buy a condominium. The new rules were supposed to take effect Oct. 1. But FHA delayed implementation until Nov. 2, and said it might modify some of the policies. Of the new requirements, there are four that most directly affect people who want to buy condos with FHA-insured mortgages:



"Spot approvals" are eliminated, and now the entire project
has to meet FHA approval before a borrower can get an FHA
insured loan.

A maximum of 30 percent of the condo project's units can have FHA-insured mortgages. There was no such limitation previously.

Before the FHA will insure a mortgage on a condo, at least half
the units must have already been sold. Again, there was no such limitation previously.

At least half of the condo project's property owners will have to occupy their units, down from 51 percent.



Before FHA will insure a loan on a condo unit, the entire condo project has to meet FHA guidelines on the financial health of the condominium association as well as fair-housing issues and the condo's location.

Since 1996, borrowers have been able to get spot approvals, in which the FHA insures a loan on a condo, although the entire project hasn't been approved. FHA is getting rid of these spot approvals and promises to make it easier, cheaper and faster to get entire projects approved. The "processes have been streamlined," the FHA says, "eliminating the need to approve units on a 'spot loan' basis.“



From a lender:
To reduce its exposure to losses, the FHA won't insure a condo unit if 30 percent or more of the units already have FHA-insured loans. This means that you could find a condo that you want to buy, but you can't get an FHA-insured loan because too many in the building already have FHA loans. If you can't afford the larger down payment on a conventional mortgage, you could be out of luck.


Sheila Bell

Dana Ill see what I can find,there is a fha site and if condo isnt on the site,then cant loan FHA