As part of our upfront due diligence process to pre-qualify potential clients for FHA and VA Condo Approvals, we ask if the project contains multi-unit condominiums. This is a confusing question since a condominium project contains multiple units.
A multi-unit condominium project is one in which the individual units contain two separate residences that transfer together on one deed. This would be akin to a grouping of two-family homes that are under a declaration of condominium.
An example of this could be a townhouse-style condominium project in which each unit owns two side-by-side units with the same deed. Another example would be an up-down, two-family unit where one person lives on the first floor and another on the second.
Multi-unit condominium projects are not eligible for an FHA approval which also means that they cannot be financed with FHA loans. Multi-unit condominium units are also not eligible for Fannie Mae and Freddie Mac financing. It may be possible to obtain a condominium project approval with the VA under certain circumstances making it eligible for VA financing.
Multi-unit condominiums are VERY rare but they do exist. I ran into one years ago in Hartford when I was a mortgage loan officer. I didn’t have much experience with condominiums and had never heard of a multi-family condominium project. It was an investment property for my borrower and we couldn’t obtain financing for him because it was a multi-unit condominium.
If you are looking to develop such a project or to purchase a multi-unit condo unit as an investment, you should keep in mind that these units are very difficult to finance which would make them tough to sell when the time comes.
The Condominium Project Approval Team at ReadySetLoan is dedicated to helping condominium projects across the nation to obtain their approvals with FHA and the VA or become recertified with FHA. We have assisted nearly 200 condominiums and we can help your association.
ReadySetLoan is an active member of the Connecticut and New England chapters of the Community Associations Institute (CAI) and is a frequent contributor to Common Interest Magazine as an expert in FHA/VA condominium project approvals.
Please contact us with any questions regarding FHA or VA condominium project approvals. You can email me at firstname.lastname@example.org or call me at 404-433-4565. I will be happy to answer any of your questions.
FHA/VA Condo Approval Specialist
404-433-4565 Cell Phone
860-644-3772 Fax Phone
Check out our article in Common Interest magazine on page 19!