How FHA Single Unit Approval Can Expand Your Home Buying Options in Today’s Market

What is FHA Single Unit Approval?

The FHA Single Unit Approval program allows eligible homebuyers to obtain FHA financing for a condo unit, even if the entire condo complex is not approved by the Federal Housing Administration (FHA). This flexibility is a game-changer, providing more purchasing power and options for buyers and real estate agents looking to close deals in desirable areas.

Why FHA Single Unit Approval Matters for Homebuyers and Real Estate Agents

When it comes to buying a condo, many buyers are restricted to complexes that have gone through the lengthy process of getting FHA approval for the entire project. With the SUA program, buyers no longer have to limit their searches to only FHA-approved complexes. They can now consider any condo unit that meets FHA's requirements for single unit approval, greatly expanding their choices.

For real estate agents, this means more properties to show potential buyers, more deals to close, and more satisfied clients who find the home of their dreams.

FHA Single Unit Approval Requirements: What You Need to Know

Here are the critical guidelines for obtaining FHA Single Unit Approval:

1. Owner-Occupancy Requirements: At least 50% of the units in the condo project must be owner-occupied.
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3. FHA Concentration: No more than 10% of the condo units in large projects (or 2 units in smaller projects of 5-9 units) can have FHA financing.
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5. Delinquency Rates: No more than 15% of the units can be 60+ days delinquent on HOA fees.
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7. Commercial Space Restrictions: No more than 35% of the total project can be used for commercial purposes.
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9. Completion Requirement: The condo complex must have been completed for at least one year and have at least five units.
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11. Financial Stability: The HOA must be financially stable, with no pending litigation that could impact the project.

How to Get a Condo Approved with FHA Spot Approval

If you are a buyer or real estate agent working with a client, here’s a step-by-step guide to navigating the FHA spot approval process:

1. Find an FHA-Approved Lender: Work with a lender experienced in FHA Single Unit Approvals who can guide you through the paperwork and process.
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3. Gather Necessary Documentation: Collect required documents from the condo's Homeowners Association (HOA), such as financial records, insurance certifications, and governing documents.
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5. Submit the FHA Condo Questionnaire: The lender will submit Form HUD-9991 to the HOA, which provides detailed information about the condo project.
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7. Wait for FHA Approval: The FHA typically takes around three business days to review and approve the application, but it could take longer depending on the complexity of the project.
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9. Proceed with the Loan Process: Once the condo receives FHA approval, proceed with the standard FHA loan underwriting process, including appraisal and final loan terms.

Why Real Estate Agents Should Embrace FHA Spot Approvals

As a real estate agent, embracing the FHA Single Unit Approval process can help you serve a broader range of clients, especially first-time homebuyers and those with lower credit scores. FHA loans are designed to be accessible, with low down payment options and more flexible credit requirements. By understanding and promoting FHA SUA, you can position yourself as a knowledgeable agent who opens up more doors—literally and figuratively—for your clients.

FHA Loans Make Homeownership Possible for More Buyers

The beauty of FHA loans lies in their accessibility. With a minimum down payment of 3.5% and more lenient credit score requirements, FHA loans are a viable option for many buyers who may not qualify for conventional financing.

By leveraging FHA Single Unit Approval, you as an agent or a homebuyer can explore more options and find the right condo unit in the perfect location without being limited to FHA-approved complexes.

Ready to Explore FHA Spot Approval? Contact Us Today!

If you are a homebuyer looking to expand your options or a real estate agent wanting to offer your clients more choices, we can help! At VAL GARROW LOANS, our team of FHA-approved lenders is ready to guide you through every step of the FHA Single Unit Approval process.

Contact us today to learn how you can benefit from FHA spot approval and take advantage of the current market opportunities.