Partner Alert

FHA Condominium Single Unit Approval Overview


This alert is providing an overview of the changes that FHA announced regarding the requirements for Single Unit Condominium Approval in an Informal Release 19-41 , Mortgagee Letter 19-13 and in an update with Mortgagee Letter 19-17. The changes are effective on October 15th, 2019.

The future Single Unit Approval process will require the following documentation:

  • Declaration, CC& R’s or Master Deed
  • By-Laws (signed or recorded)
  • Articles of Incorporation
  • Plat Map
  • Site Plans
  • Evidence of HOA Master Insurance Coverage (building, liability and fidelity)
  • Current approved annual budget
  • Current balance sheet
  • Current profit and loss statement
  • Last annual budget end of the year financial statements
  • Current reserve study (if applicable)
  • Current signed management contract
  • Evidence of management company fidelity bond coverage
  • Including NEW Single Unit Approval Condominium questionnaire (HUD 9991)

The concentration allowances are as follows:

  • If the condominium project contains over 10 (ten) units, the project cannot have more than 10% of the total units with FHA mortgages insured, utilizing the Single Unit Approval process.
  • If the condominium project contains 10 (ten) or less units, the maximum number of FHA mortgages insured by utilizing the Single Unit Approval process is 2 (two).

Our team is available to assist in both the collection and review of all required documentation. Please note, the documentation requirement for the single unit approval and full complex approval are the same.

IMPORTANT! With the updated release of Mortgagee Letter 19-17 , it outlines the origination requirements for a Single Unit approval. Prior to submitting for an approval of a single unit, the borrower must meet the residual income requirement without the use of compensating factors. The borrower must also meet property charge payment history without the use of Extenuating Circumstances. All other HECM eligibility and program requirements remain in effect.

Please note we will have an additional alert with the information surrounding the process for review and the required forms.

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Disclaimer-My Reverse Options/ is a licensed California Mortgage Broker. We provide information to the public and establish relationships. All loans initiated on this site are processed under NMLS license # 1928866. Our preferred lending partners are American Advisors Group (AAG),  Finance of America (FAR) and Mutual of Omaha Mortgage.