Update 11-24-2013: According to this article, FHA approval for condominiums fell to 10% even after a light relaxation of FHA condo approval terms and condition (i.e, to get an FHA loan).
The FHA was planning to relax some of the restrictions just imposed in 2010. http://seattletimes.nwsource.com/html/realestate/2018215432_harney20.html
In 2010, recently enacted Federal rules regarding FHA loans require these three elements to exist before FHA will approve a loan to purchase a condominium unit:
- less than or = 15% of (occupied) units’ HOA fees are delinquent
- more than or = 10% of HOA budget must be held in reserves (most HOAs hold some in reserve, but many don’t hold more than 10%) – This could require a hike in existing HOA fees even when the HOA has been fiscally responsible and held costs down.
- less than or = 50% of the units can be held/owned by investors
Source: Atlanta Business Chronicle – September 3-9, 2010, page 8A
You may search this HUD condo website to see if your condo is approved and if originally approved before 2000, they will require full (not streamlined) recertification.
References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them.