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FHA loans · HUD Handbook 4000.1FHA condos: when the project isn't approved – Single-Unit Approval

FHA will insure a mortgage on a condominium unit only if the unit is in an FHA-approved condominium project, meets FHA's definition of a site condominium (for example, detached homes with no shared garages or attached buildings), or has gone through Single-Unit Approval. Single-Unit Approval is for a unit in a project that is not on FHA's approved list when the case number is assigned. The loan must get an Accept from FHA's TOTAL Mortgage Scorecard, or be at most 90% loan-to-value if manually underwritten. The project must have a certificate of occupancy (or equivalent) for all units in the complete project or legal phase; the unit's own certificate must be at least a year old, or the unit must have been occupied; the project needs at least five units, cannot be manufactured homes, must have no ineligible characteristics, and must allow free assumability. FHA can stop issuing case numbers once FHA-insured loans exceed 10% of the units in a project of 20 or more units, or two loans in a smaller one. The lender submits form HUD-9991, the condominium questionnaire – usually completed with the association's help – and confirms at least 50% owner occupancy.

Three ways an FHA condo qualifies

  1. 1. Approved project

    The condominium project is on FHA's approved list.

  2. 2. Site condominium

    Detached homes with no shared garages or attached buildings, or detached/townhouse-style units that include the land.

  3. 3. Single-Unit Approval

    The lender approves the one unit, loan by loan.

Single-Unit Approval checklist

  • TOTAL Accept, or manual underwriting at no more than 90% LTV.
  • Certificate of occupancy for every unit in the complete project or legal phase.
  • The unit's certificate issued at least one year ago, or the unit has been occupied.
  • At least five units; not manufactured homes; no ineligible characteristics.
  • Free assumability (24 CFR 203.41).
  • FHA concentration: no more than 10% FHA loans (20+ units) or two FHA loans (fewer than 20).
  • Owner occupancy of at least 50%.
  • Form HUD-9991 completed, signed and dated.

What the TC can do

  • On day one of an FHA condo deal, check whether the project is FHA-approved.
  • If it is not, ask the association early for what the lender needs to complete HUD-9991 – owner occupancy, number of units, FHA loans.
  • Leave time in the financing deadline; a small project may already have its two FHA loans.

Questions buyers and agents ask

Can you get an FHA loan on a condo that is not FHA-approved?

Yes, through Single-Unit Approval, if the unit and the project meet HUD's requirements – including at least five units, 50% owner occupancy and FHA concentration limits (HUD Handbook 4000.1).

What is form HUD-9991?

The FHA Condominium Loan Level/Single-Unit Approval Questionnaire: it collects loan, project and unit information, and the lender submits it completed, signed and dated.

How many FHA loans can a small condo project have?

For Single-Unit Approval, FHA may stop new case numbers once a project under 20 units has two FHA-insured loans, or once FHA loans exceed 10% of the units in a project of 20 or more.

Related guides

ClosingCode adds the HOA documents to every deal with an association and requests them by link – a good moment to ask the association for the condo questionnaire answers too.

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Source: HUD Handbook 4000.1 (last revised 8/12/2026), II.A.1 Condominium Units and II.A.8.p.iii Single-Unit Approval, hud.gov, read October 25–26, 2026.

General information about FHA-insured loans, not legal or financial advice. ClosingCode is software; it is not a lender. This guide is not a substitute for the advice or services of an attorney.