Why aren't all Denver condos approved for FHA financing? It is a question that I get a lot, especially with first time home buyers looking for a condo in or around Downtown Denver. FHA is very unique in that you can purchase a home with as little as 3.5% down and for many first time buyers that is the difference between owning a home and not. So you would think that all condos would allow FHA financing, but unfortunately, it is more complicated than that.
FHA has set standards for condo buildings to determine if they fit within their lending criteria. These standards include the number of units that are owned by investors, the amount of commercial space in the building, the number of delinquencies in the building, reserves with the HOA and the list goes on. Even if a condo complex meets all the criteria, it still has to go through a lengthy approval process that costs a decent amount of money and takes quite a bit of time. With FHA changing theirrequirementsconstantly, most condo complexes have decided the qualifying process just isn't worth it and have let theirqualificationsslip if they ever were qualified to be begin with.
With the new changes to FHA coming, read more about ithere, my guess is that fewer and fewer condo complexes will be FHA approved moving forward. Luckily there are some great conventional loan options available. If you are looking to purchase a condo in Downtown Denver, I would highly suggest getting approved for a conventional loan on top of a FHA loan because the number of condo complexes for you to choose from will increase ten fold. If FHA is your only option, you can search for FHA approved condos by clickinghere.
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