FHA Condo Approval: How to Find and Buy an Approved Building

Updated 20 May 2026

FHA financing (3.5% down for credit scores 580-plus) is the most accessible mortgage path for first-time condo buyers. The catch: the condo project itself must be FHA-approved, not just the buyer. This page covers how to search the HUD approval list, the criteria that get buildings denied, the Single-Unit Approval (sometimes called PUNCH) workaround for non-approved buildings, and the renewal timing that can disrupt your closing.

How to check if a building is FHA-approved

HUD maintains a free, searchable database at entp.hud.gov/idapp/html/condlook.cfm. Search by state, city, or condo name. Approval status is current as of the displayed expiry date. As of 2026, roughly 6,800 condo projects are FHA-approved nationwide, a fraction of the total US condo inventory.

FHA approval criteria (as of 2026)

Owner-occupancy: at least 50% of units owner-occupied (down from 51% in earlier rules; some FHA reciprocity programs accept lower).
Concentration limits: no single entity owns more than 10% of units (multi-unit owners include LLCs and individuals).
Reserve funding: annual budget allocates at least 10% to reserves (waivable in limited cases).
Insurance: master policy with adequate coverage on the building structure and common areas.
Litigation: no pending material litigation against the HOA. Routine collection actions are exempt.
Commercial space: commercial / non-residential space limited to 35% of total floor area (sometimes higher with HUD exception).
Delinquency rate: fewer than 15% of units more than 60 days delinquent on dues.
FHA concentration: no more than 50% of units financed by FHA loans (the project, not just current sale).

Source: HUD Single Family Housing Policy Handbook 4000.1, Section II.A.8 (Condominium Project Approval), 24 CFR Part 203.

Single-Unit Approval (PUNCH) for non-approved buildings

Reinstated by HUD in 2019, Single-Unit Approval (informally called PUNCH for Project Unit Negotiated Condo Habitability, though HUD uses the term Single-Unit Approval) lets a lender obtain FHA approval on a single unit in an otherwise unapproved building.

Requirements include: the building must meet most underlying project-approval criteria, FHA concentration in the building must be under 10%, the unit being purchased adds to that count. The lender packages the documentation; HUD review takes typically 4 to 8 weeks. Not all lenders offer Single-Unit Approval; those that do usually charge a modest packaging fee.

Practical: if your dream condo is in a non-approved building, ask your lender about Single-Unit Approval before assuming you cannot use FHA. The trade-off is closing-timeline delay; sellers in hot markets may not accept the extra time.

Approval expiry: the trap nobody warns you about

FHA approval is valid for 3 years. The HOA must reapply before expiry. If approval lapses during your purchase process (especially if your closing is delayed), your FHA loan can be cancelled mid-process. Always check the expiry date on the HUD database before going under contract; if expiry falls within 60 days of expected close, confirm with the HOA management that renewal is in progress.