Four things mortgage professionals should know heading into their next condo transaction.

Condo Confusion? Here's What You Need to Know About Agency and FHA SUA Options

If you have ever had a condo deal stall because the project wasn't on an approved list, you are not alone. Condo financing carries a reputation for being complicated, but a lot of that reputation comes from outdated assumptions. The rules have shifted in meaningful ways, and our condo team built our process specifically to help you work through them.

Here are four things mortgage professionals should know heading into their next condo transaction.

1. FNMA and FHLMC Accept FHA-Approved Condominiums

If a condo project already carries FHA approval, that approval can also open the door to conventional financing. Both Fannie Mae and Freddie Mac will purchase loans secured by units in FHA-approved projects, provided the project appears on HUD's approved list and meets the applicable agency requirements. In practice, this means an FHA approval is not just useful for FHA loans. It can give your borrower a second financing path through conventional products, which is especially valuable when a project's conventional approval status is unclear or has lapsed.

2. PwrTPO Can Do Single Unit Approval (SUA) on FHA Loans

Not every condo project carries FHA project approval, but that does not automatically rule out an FHA loan. Through HUD's Single Unit Approval process, a single unit within a non-approved project can be approved on a case-by-case basis, provided the project meets a subset of FHA's standard requirements, including minimum owner-occupancy, FHA insurance concentration limits, and HOA delinquency thresholds.

SUA submissions require a Direct Endorsement underwriter and a completed HUD-9991 questionnaire from the HOA or management company. That paperwork and review process is exactly where our condo team adds value. We walk you and the association through what is needed so a one-off condo opportunity does not turn into a lost deal.

3. The 50% Owner Occupancy Requirement Was Retired for Established Investment Projects

This is one of the more significant recent changes in condo lending. Both Fannie Mae and Freddie Mac eliminated the owner-occupancy concentration requirement for investment property transactions in established condo projects undergoing a Full Review. Previously, if more than half the units in an established community were non-owner occupied, conventional investor financing was off the table. That cap is gone for qualifying established projects, which means more investment opportunities for your borrowers in communities that previously could not get conventional approval.

This change took effect immediately upon the agencies' March 2026 guideline updates, so if you walked away from an investment condo deal in the past because of occupancy ratios, it may be worth a second look.

4. We Have a Non-Warrantable Condo Program for the One-Off Issues

Sometimes a project does not check every box for agency or FHA approval, whether that is a litigation flag, a commercial space ratio, an HOA budget issue, or something else entirely. That is where our non-warrantable condo program comes in. It is designed specifically to help you close the condo issues that would otherwise put a deal on hold.

Our Condo Team Is Built to Help You Close More Condos

Condo guidelines move fast, and the agencies have made significant changes already this year. Whether you are navigating an FHA Single Unit Approval, looking to take advantage of the updated investment property rules, or working through a non-warrantable scenario, our condo team is here to guide you through the requirements step by step.

Have a condo deal you are not sure how to structure? Reach out to your account executive and let our condo team take a look.

Equal Housing Lender | NMLS ID #1124061

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