Selling Guide

Published October 2, 2018

B4-2.2-05: FHA-Approved Condo Review Eligibility (09/04/2018)

This topic contains information on FHA-approved condo review eligibility, including:

Overview

Fannie Mae accepts delivery of FHA mortgage loans in FHA-approved condo projects that appear on the FHA-approved condo list. For conventional mortgage loans, Fannie Mae will accept delivery of mortgages in established projects on the FHA-approved list provided the approval was completed by FHA HUD Review and Approval Process (HRAP) rather than through an FHA Direct Endorsement Lender Review and Approval Process (DELRAP). FHA condo project approval is not acceptable for conventional mortgage loans secured by units in new or newly converted condo projects.

Lenders may search for FHA-approved condo projects by location, name, or project status online at HUD.gov or through CPM.

Lenders must maintain copies of the FHA approval documentation in the loan file.

Project Requirements

For FHA mortgage loans, lenders must ensure that

  • the FHA standard conditions have been met for presale, occupancy status, and completion;

  • any additional conditions noted by FHA have been met;

  • the project is not an ineligible project as defined in B4-2.1-03, Ineligible Projects;

  • the project is covered by the required insurance as set forth in Subpart B7-4, Liability and Fidelity/Crime Insurance Requirements for Project Developments; and

  • the project is not comprised of manufactured homes.

For conventional mortgage loans, lenders must ensure that

  • the project meets Fannie Mae’s criteria to be considered an established project;

  • the project is not comprised of manufactured homes;

  • the project meets the Requirements Applicable to All Properties in a Condo, Co-op, or PUD Project described in B4-2.1-01, General Information on Project Standards;

  • the project is not an ineligible project as described in B4-2.1-03, Ineligible Projects; and

  • any additional conditions noted by FHA have been met.

Document Retention

When lenders deliver mortgage loans secured by condo units in an FHA-approved project, lenders must retain the documentation as set forth in Document Retention in B4-2.1-01, General Information on Project Standards.

Related Announcements

The table below provides references to the Announcements that have been issued that are related to this topic.

Announcements Issue Date
Announcement SEL-2018-07 September 04, 2018
Announcement SEL-2018-05 June 05, 2018
Announcement SEL-2014–13 November 10, 2014
Announcement SEL-2012–06 June 26, 2012
Announcement 09–37 December 30, 2009