FHA Condo Loans

With FHA condo loans in Florida, the building has to qualify before you do. Check the project first, because that is where these deals fail.

What FHA condo loans in Florida require

• Project approval through HRAP or DELRAP, or a single-unit approval
• 3.5% down, exactly as on a house
• The association must meet FHA owner-occupancy, insurance and financial tests
• FHA reviews the HOA budget and reserves
• Litigation screening on the association
• Commercial space limited to roughly 25% to 35% of total floor area

Check the building before you fall for the unit

Search the address on HUD’s condominium lookup first. It takes a minute and tells you whether the project holds current FHA approval, when that approval expires, or whether it lapsed.

Approval expires. A building approved three years ago may have let it lapse, and the association has to reapply. Since that process runs through the board rather than through you, it can take months, and some boards simply decline to bother.

Single-unit approval when the project is not approved

If the building lacks approval, one route remains. Single-unit approval lets FHA insure your individual unit inside an unapproved project, provided the project still meets certain conditions on insurance, litigation and delinquent dues.

However, FHA caps how many units in any one project can use it. In a building of ten or more units, no more than 10% may hold single-unit approvals at once, so a popular building can fill its allocation. Therefore ask early whether the slots are available, because finding out late costs you the contract.

Why Florida is the hardest condo market in the country right now

Two forces have pushed many Florida associations out of FHA eligibility since 2021.

The first is structural. After the Surfside collapse, Senate Bill 4-D introduced milestone inspections for buildings three storeys and taller, and required associations to fund structural reserves properly rather than waiving them each year. Buildings that had deferred maintenance for decades suddenly faced both an inspection and a reserve obligation.

The second is insurance. Association premiums have risen steeply, and FHA requires adequate coverage before it will approve a project. An association that cut coverage to control dues can fail on that basis alone.

The visible result is special assessments, which are now common across Florida. They matter to you twice over. They raise the monthly cost the lender uses to qualify you, and a large unpaid assessment can itself block project approval. Therefore ask for the association’s last two years of minutes, its reserve study, and any pending assessment before you go under contract.

If the condo will not work with FHA

Conventional financing applies lighter project rules than FHA and often succeeds where FHA cannot. Read warrantable versus non-warrantable condos for how that review differs, and see the Florida condo mortgage guide for the wider picture.

Sources: HUD Single Family Housing Policy Handbook 4000.1 on condominium project approval and single-unit approval, and Florida Statutes 553.899 and 718.112 covering milestone inspections and structural reserves. Approval status changes; check the HUD lookup before you rely on it.