Financing in 02478>Question Details

Atisman, Other/Just Looking in 02478

FHA refinancing for 2-unit condo

Asked by Atisman, 02478 Sun Apr 25, 2010

I have seen some posts from mortgage professionals in this site, saying that at least 4-units should be in a condo project for it to be approved for FHA loan. At the same time, I have seen another post saying that there's no such rule and 2-unit condo could be qualified for getting FHA loan. I'm curious which is the fact. Maybe the rule has been changed? I'm asking as of Apr. 2010. Thanks in advance.

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Stephen Suech’s answer
Lew is right. Just needs a full approval through HUD or a Lender with the authority to approve it through DELRAP. I work with many Lenders who can do this, or I can assist you in the paperwork do get the approval directly from HUD. Let me know if I can help.
1 vote Thank Flag Link Tue Apr 27, 2010
The requirement used to be that there must be at least 4 units in the condo complex in order for a unit to be eligible for FHA financing. The complex did not have to approved by FHA - we used to be able to do "spot approvals."

Today, the requirement was reduced from a minimum of 4 units to 2 units. However, the complex must be either be approved by FHA or undergo the DELRAP Process (Direct Endorsement Lender Review and Approval Proces). The requirements for approval are also more stringent than they used to be.

For further information, see
1 vote Thank Flag Link Mon Apr 26, 2010
The bigger question is is: is the condo complex FHA approved? If it's not, it doesn't matter if there are 2 or more units. If it's not on the list of FHA projects, it won't qualify for an FHA loan.

Here's a link where you can fin the FHA approved condo projects

Good luck!
1 vote Thank Flag Link Sun Apr 25, 2010
2 units are fine. I just had a 4-unit condominium project approved in Belmont and know the process. It took 5 weeks from submission to FHA, not counting the time to assimilate the documents needed to submit the application. You should NOT submit an incomplete application but othewise it's not a real complex process. Anyone can do it through what HUD' (FHA's parent agency) calls HRAP. It's easier with 2-4 units than with larger developments. Contact the HUD Home Ownership Center by phone at 800-CALL FHA. They'll assist you in the process or ask your mortgage professional to do it for you.

0 votes Thank Flag Link Thu Dec 30, 2010
The rules have changed and I believe you can finance a two unit condo as long at the other unit is owner occupied. I am selling a two unit and the buyer is going FHA. I service the Belmont area and if you reach out I will give you more information. Best
0 votes Thank Flag Link Wed Apr 28, 2010
Here's the link regarding FHA discontinuing spot approval

And here's the link for an overview of the DELRAP (Direct Endorsement Lender Review and Approval Process)

Good luck!
0 votes Thank Flag Link Wed Apr 28, 2010
Heidi - Spot Approvals are no more. HUD did away with them earlier this year. Has to be a full approval through HUD or through a Lender approved to do DELRAP.
0 votes Thank Flag Link Wed Apr 28, 2010
I think spot approvals will work here!!
0 votes Thank Flag Link Wed Apr 28, 2010
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