FHA Condo Approval Specialist: Can You Help to Get a 2-Unit Condominium Approved with HUD?

Can You Help to Get a 2-Unit Condominium Approved with HUD?

Can You Help to Get a 2-Unit Condominium Approved with HUD?

Driving through a torrential downpour today, I fielded a phone call asking me if I could help to get a 2-unit condominium approved with HUD.question

Don’t worry, I was using my Bluetooth.

The call came from, Mike, a branch manager for a mortgage office in Madison, WI.  He shared his predicament where his client was attempting to use an FHA Reverse Mortgage to buy a unit in a 2-unit condominium project.  The loan is not possible at this point because the project is not approved with HUD.

He was referred to me by a mutual business associate, Ray Denton, who works in California and he wanted to run the scenario by me to see if the project has a chance to get approved.

After his explanation of the situation, my first question was:

“What are the unit boundaries in this 2-unit condominium?”

This is a very important question and can be the determining factor as to whether or not this 2-unit condominium can get approved with HUD.  As explained in this previous article, it is very important that the unit owners and the HOA carry the proper insurances.

HUD has the same basic requirements for 2-unit condominiums as it does for 200-unit condominiums.  However, it does allow for certain variances for small projects consisting of 2-4 units.

Once such deviation is that it doesn’t require that the condominium have Covenants, Conditions and Restrictions (CC&R’s) or By-laws but it does require that an agreement exists between the unit owners.  The agreement must include details about how the property will be maintained and who is to maintain it and how the property is to be insured.

Luckily for Mike, the developer of this project took the time to draft and record a Declaration with CC&R’s.  I asked him if he could quickly scan and email the document to me and he did.

The Declaration had the insurance requirements aligned with HUD’s guidelines. The only problem is that the document did not contain the description of the unit boundaries and common areas.  Exhibit B was missing and I asked for him to locate it to make the final determination.

The bottom line to all of this is that if the unit boundaries include only the interior of the units and everything else is deemed common elements or limited common elements, this project should be approvable based on this information.


 Image courtesy of freedigitalphotos.net

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 askeric@readysetloan.com 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

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 Check out our article in Common Interest magazine on page 19!

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Comment balloon 2 commentsReadySetLoan Condo Approval Team • September 03 2013 09:07AM


Thank You for helping Mike with that, Eric - it's appreciated!

Posted by Raymond Denton, Foothill Ranch Specialist (Homesmart / Evergreen Realty) over 5 years ago

Your expertise is shining through again, great job with your post!

Posted by Joe Petrowsky, Your Mortgage Consultant for Life (Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709) over 5 years ago