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Read our collection of guides and articles about homebuying to help you on your mortgage journey.

![Person on phone with two green semi-circles and one full circle, representing online mortgage pre-approval, against a yellow background.](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F39d7c225ee554b7386e65c5b0dd22e9d)

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  <div class="learn">
<p class="learnfont"><strong>What You’ll Learn</strong></p>

<p class="learnfont">Where to get a mortgage pre-approval letter online</p>

<p class="learnfont">What you need to get pre-approved with a digital lender</p>

  <p class="learnfont">When and how to apply for mortgage pre-approval </p>

  </div>
  <br>

Buying or refinancing a home is the most unique and significant transaction many people will experience in their lifetime. Where do you start? [How much can you afford?](https://better.com/how-much-house-can-i-afford) These kinds of questions may seem daunting, especially for first-time homebuyers. Building a budget is generally a good first step, and a pre-approval letter is the industry standard when it comes to understanding how much a lender might be willing to let you borrow. Luckily, getting pre-approved is easier than ever—you can do it directly from your couch [when you work with an online lender ](https://better.com/content/benefits-of-online-lender/ "when you work with an online lender ")(and it takes as little as 3 minutes when you work with Better Mortgage.)
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 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/preapprovals/purchase">Get pre-approved in as little as 3 minutes</a>  
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## Home loan online pre-approval: simplifying the home buying process

[Buying a home](https://better.com/content/buying-your-first-home-with-better-mortgage) is an exciting milestone, but it can also be a complex and overwhelming process. One of the first steps you should take as a serious home buyer is to get pre-approved for a mortgage loan.

Mortgage pre-approval is an important step that can give you the confidence and financial clarity you need as you start looking for homes.

In this blog, we will explain the mortgage pre-approval process, as well its benefits. We will also provide tips for pre-approval success and explain how Better.com can assist you in obtaining your home loan pre-approval. So, let's dive in and discover why mortgage pre-approval is your first step towards mortgage success.


## Understanding mortgage pre-approval online

Before we delve into the importance and benefits of mortgage pre-approval, let's start by understanding what exactly it means. Mortgage pre-approval is when a lender checks your finances to see how much money you can borrow for a house.

Mortgage pre-approval plays a crucial role in the home buying process, acting as the first step towards mortgage success. Here are some key reasons why mortgage pre-approval is of utmost importance:

  <li>Mortgage pre-approval tells you how much you can borrow. With a pre-approval letter, you know your borrowing power and can focus on homes within your budget.
  <li>With a pre-approval letter, you can confidently make offers. A pre-approval indicates your chances of getting a mortgage loan are higher.
  <li>Pre-approval helps you find the best lender. It allows you to compare loan options, rates, and terms from different lenders. This way, you can get the best deal for you.
  <li>A pre-approval letter can make buying a home faster. Sellers and agents like serious buyers who have already been pre-approved. With a pre-approval letter, you can expedite the home buying process, making your offer more attractive to sellers.
  <li>A pre-approval letter helps in negotiations. It shows sellers that you are more likely to receive a loan offer. This makes you a stronger candidate.

<sp></sp>

### The differences between mortgage pre-approval and prequalification

While mortgage pre-approval and prequalification may sound similar, they serve distinct purposes in the home buying process. Understanding the differences between the two can help you navigate the mortgage process more effectively. Here's a breakdown of mortgage pre-approval and prequalification:

  <li> Prequalification is an estimate, while pre-approval provides an exact amount. Please note: while a pre-approval can provide an exact amount, it’s not a commitment letter for a lender to lend you this exact amount. 
  <li> Prequalification is based on the information you provide to a lender, while a pre-approval involves a lender looking at your financial history, credit score, and other information.
  <li> Pre-approval is a more rigorous process compared to prequalification: pre-approval requires documentation and a credit check, while prequalification is usually done online and doesn't involve a thorough review of your financial information.
  <li> Pre-approval indicates a serious intent to buy, unlike prequalification: pre-approval demonstrates that you are a serious buyer, as it involves a more extensive assessment of your financial situation. Prequalification, on the other hand, is a preliminary step that gives you a general idea of your borrowing power. 
  <li> A pre-approval letter carries more weight with sellers than a prequalification letter: A pre-approval letter from a lender holds more credibility with sellers and real estate agents, as it signifies that you have already undergone a comprehensive financial review and are likely to secure a mortgage loan. A prequalification letter, on the other hand, may not carry the same weight.

<sp></sp>
## How online mortgage pre-approval works

Now that we understand the importance of [mortgage pre-approval](https://better.com/content/how-to-get-a-mortgage-approval), let's explore how the process actually works. Mortgage pre-approval involves working closely with a loan officer or mortgage lender who will guide you through the  process. Here's a brief overview of how it works:

### Key factors considered for mortgage pre-approval

During the mortgage pre-approval process, lenders consider several key factors to evaluate your financial stability. Here are some of the main factors considered for mortgage pre-approval:

  <b>Credit score:</b> Lenders assess your credit score, which reflects your credit history and payment behavior, to determine your creditworthiness. A higher credit score generally translates to better loan terms and interest rates.
 

<b> Loan amount:</b> Lenders analyze your financial situation and determine the maximum loan amount they are willing to offer you based on various factors, including your assets.
 
<b>Debt-to-income:</b> Lenders look at your [debt-to-income ratio](https://better.com/content/what-is-a-good-debt-to-income-ratio) and assess the risk of lending to you based on your financial situation.


## Benefits of home loan online pre-approval

Now that we've covered the pre-approval process, let's explore the benefits of obtaining a home loan pre-approval. Mortgage pre-approval offers numerous advantages for home buyers, including:


### Advantage in home buying negotiations

Being pre-approved for a mortgage loan can give you a significant advantage in home buying negotiations. Here are some specific benefits of mortgage pre-approval in negotiations:

  <li> Pre-approval can make you a serious buyer, strengthening your negotiation position against other buyers
  <li> It signals financial readiness, making sellers more inclined to consider your offer
  <li> It shows your financial situation has been reviewed by a lender.
  <li> It provides confidence to navigate negotiations, knowing what you can afford.
  <li> It can accelerate the loan processing time once you have an accepted offer.

<sp></sp>


## Common misconceptions about home loan pre-approval

While mortgage pre-approval offers numerous benefits, there are also common misconceptions associated with it. Let's address some of these misconceptions to ensure a clear understanding of mortgage pre-approval:

  <li> Pre-approvals do not guarantee a mortgage, regardless of circumstances: While it's a strong indicator of your ability to secure a mortgage loan, it is not an absolute guarantee.
  <li> Pre-approvals are not the same as prequalifications: Pre-approvals involve a more rigorous assessment, whereas pre-qualifications are just based on what a borrower states.
  <li> Pre-approvals do not require a hard credit check: While pre-approval requires a credit check, it is considered a soft inquiry, which does not significantly impact your credit score.
  <li> Pre-approvals are not evergreen: A pre-approval letter typically has an expiration date.

<sp></sp>
## Tips for home loan pre-approval success

Ensure that your credit report, credit history, and credit score are in good standing before seeking pre-approval. Managing your monthly debts, credit cards, and overall financial situation will enhance your pre-approval chances. Lastly, collaborating with a mortgage lender or loan officer can help you navigate the pre-approval process smoothly.


## How Better.com can help with your home loan online pre-approval

Better.com streamlines the mortgage pre-approval process with its user-friendly 100% online platform. The entire process can take as little as 3 minutes and will have no impact to your credit score.

Once the application is complete, you will get a good understanding of your buying power, alongside an editable pre-approval letter you can share with your agent or use when making offers to sellers.

## Frequently asked questions about home loan pre-approval

### Does home loan pre-approval affect your credit score?
Home loan pre-approval typically involves a soft credit inquiry, which doesn't impact your credit score. However, if you apply for multiple pre-approvals within a short period, it can slightly lower your score. It's important to limit the number of applications and choose a reputable lender to minimize any potential impact on your credit.

### Can you be denied a mortgage after pre-approval?
It is possible to be [denied](https://better.com/content/mortgage-application-denied) a mortgage after pre-approval. Pre-approval is based on the information provided at the time of application, but it does not guarantee final approval. Factors such as changes in financial circumstances or property appraisal could result in denial. It's important to maintain financial stability and avoid any major changes during the home buying process.

### How long does it take to get pre-approved for a home loan?
The timeframe for getting [pre-approved](https://better.com/content/how-to-get-pre-approved-for-a-mortgage) for a home loan varies but typically takes a few business days. With Better's pre-approval, however, the process can take as little as 3 minutes.

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/preapprovals/purchase">Get pre-approved in as little as 3 minutes</a>  
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## Next steps after home loan pre-approval

After you get your [pre-approval letter](https://better.com/faq/pre-approval-letters/how-do-i-get-a-pre-approval-letter), you can start (or continue) or home search with a clear price range in mind. You can edit your pre-approval letter in your Better Mortgage dashboard at any time, so if you are looking to put in an offer, make sure to include your edited pre-approval letter to strengthen your position as a buyer.

Once you have an accepted offer, you can visit your dashboard to start uploading the necessary documentation for the closing and financing process — getting you into your home sooner!

## The bottom line: why mortgage pre-approval online matters

In conclusion, getting pre-approved for a home loan is a crucial step in the home buying process. It provides you with a clear understanding of your financial capabilities and helps you set realistic expectations when searching for your dream home. Not only does it give you an advantage in negotiations, but it also accelerates the loan processing time, allowing you to close on your new home faster.

To get your pre-approval in as little as three minutes, click <a href="https://better.com/start" title="here">here.</a>

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 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">Get pre-approved in as little as 3 minutes</a>  
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Want to use an online lender to buy or refinance your home? Get pre-approved for a mortgage online easily with Better Mortgage, on your schedule and terms.

Online mortgage pre-approval: Your first step to success

Blog post image for Online mortgage pre-approval: Your first step to success

![Two people reviewing information on a laptop and a piece of paper, learning how to get a mortgage approval.](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fe9fddf8b52174cb38f926c9d54534a0a) 

  </div>
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Anyone who’s not one of the lucky few to buy a home with cash will need to get approved by a lender for a mortgage. The first thing to know about a mortgage approval is there’s no single moment of ‘approval’ throughout the process. Instead, there are multiple approvals that increase in verification and certainty as you get closer to buying a home. 

The ease and [speed of approvals](https://better.com/content/home-buying-process-timeline) can vary greatly from lender to lender, so keep this in mind as you shop around. As a general rule of thumb, the stronger and faster the approval, the better. Stronger approvals can increase your chances of winning an offer and help give you peace of mind that you’ll get the loan.

In this post, we’ll break down the different types of buyer approvals and when and how to get them. 

## What is a mortgage approval? <br> 

A mortgage approval is the process by which a lender evaluates a borrower's financial and creditworthiness to determine if they are eligible for a mortgage loan for specific terms and conditions of that loan, like rate and loan term length. 

Mortgage approval is a crucial part of the homebuying process, as it signifies that the lender is willing to provide the borrower with the funds needed to purchase a home, subject to certain conditions and requirements.

The three main types of mortgage approvals we’ll review here are pre-approval, verified approval, and conditional approval. 

## What is a mortgage pre-approval? <br>

A mortgage pre-approval is an estimate of what a lender is willing to lend you. It’s based on your income, assets, debts, and credit profile, as well as the loan term, (e.g. 30-year fixed, 15-year fixed), down payment, property type, and estimated interest rate, property taxes, homeowners insurance.

Once you’re pre-approved, lenders will [issue you a letter](https://better.com/faq/pre-approval-letters/how-do-i-get-a-pre-approval-letter) stating the loan amount you are pre-approved for. One thing to keep in mind is that your letter will often show the loan amount that you think you’ll need to borrow instead of your maximum pre-approval amount. This is because you typically include the letter when you submit offers, and it can weaken your negotiating power to show sellers the maximum you can afford. 


### When should I get a mortgage pre-approval? <br> 

It’s recommended that you get pre-approved before you start shopping for homes to get a sense for your home buying budget, view homes within that budget, and show sellers that you’re a serious buyer who can afford the home. 
 

### How to get a mortgage pre-approval? <br> 

To issue you a pre-approval, lenders will collect information on your income, assets, and debts. Because pre-approvals are not standardized across lenders, the information and documentation you need to provide will also vary by lender. 

At Better Mortgage, your [pre-approval](https://better.com/content/where-and-how-to-get-a-mortgage-pre-approval-online) is based on stated income and assets and a soft credit pull. This will never impact your credit score, so anyone who is curious about their affordability can get a pre-approved estimate at any time. 

### Is my mortgage pre-approval final? <br> 

The more accurate you are with your inputs on income and assets, the more accurate your pre-approval will be, but a pre-approval is not final and is only intended to give you an estimate of how much you can borrow. To get increased certainty around how much you can afford, we recommend getting a verified approval.

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<div style= "background-color:#F0F7F1;padding: 24px 42px; color:#292B29; border-radius: 12px"  >
<h3 style="font-weight:bold;">Three Minute Pre-Approval
</h3>
<p>
At Better Mortgage, our <a style="color:#292B29; " href="https://better.com/start">pre-approval process </a> is 100% digital and takes as little as three minutes. At the end of pre-approval, you’ll see your maximum estimated loan amount. Plus, you can edit your letter 24/7 in your dashboard to reflect any loan amount within your maximum that you need.
</p>
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## What is a mortgage verified approval? <br> 

A verified approval also shows how much a lender is willing to lend you for specific loan terms, but unlike a pre-approval, it’s [fully underwritten](https://better.com/content/underwriting-process) by an underwriter. 
<br>

### When should I get a verified approval? <br> 
 
Verified approvals are not required in the mortgage process, but can be extremely impactful before you start making offers in order to stand out against competing bids. 

Verified approvals can increase your likelihood of winning an offer because sellers want confidence that the offer they accept won’t fall through. A verified approval gives a seller certainty that their buyer will get the loan as long as the buyer’s finances don’t change during the mortgage process, and that everything with the house, like appraisal and title, is completed successfully.

 ### How to get a verified approval? <br> 

In order to issue a verified approval, lenders will need to verify your income, assets, and credit. This will involve a hard credit check, employment verification, and a review of certain documents. The exact set of documents will vary based on each person’s financial situation, but typically include: 

<li> W-2s
<li>  Tax returns 
<li>  Pay stubs 
<li>  Bank statements</li>

<br>

#### Is my verified approval final? <br> 

While a verified approval is an official document telling you how much a lender will let you borrow, your loan is not guaranteed. You can lose your approval if your financial situation changes. For example, your qualification could be impacted if you lose your employment or take out a new loan during the mortgage process that impacts your credit and/or debt-to-income ratio.

Additionally, any approval is conditional upon the home you buy also meeting certain requirements, like appraising at the amount you have placed an offer for, and clearing title to confirm that no one else has an ownership claim to the property. At the time you get a verified approval, you may or may not have a specific home address, and appraisal and title don’t start until after you have an accepted offer, so it is not final.

#### What is a debt-to-income ratio?

Your [debt-to-income ratio](https://better.com/content/what-is-a-good-debt-to-income-ratio) (DTI) is your monthly debt payments divided by your gross monthly income. The highest DTI you can have and still get approved for a conforming loan at Better Mortgage is 50%. Let’s say your monthly debt payments are $3,800 and gross monthly income is $8,000, so your DTI is 47.5%. If you take out an auto loan at $300/month, your debt to income ratio would increase to 51.25% ($4,100 / $8,000 = .5125) and potentially make you ineligible for the mortgage. 

<div style= "background-color:#F0F7F1;padding: 24px 42px; color:#292B29; border-radius: 12px"  >
<h3 style="font-weight:bold;">One Day Verified Approval
</h3>
<p>
While this process can take weeks with traditional lenders, at Better Mortgage we offer verified approvals in 24 hours or less for qualifying borrowers.¹
</p>
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<br>

## What is mortgage conditional approval? <br>

Conditional approval is a binding agreement from your lender approving you for specific mortgage terms on the home you are buying. Like a verified approval, it means your finances have been fully underwritten. The key differences are that it is always for a specific home and is issued after you’ve made an offer. 

At this point, the steps left until you close are related to verifying that there are no issues with the items like home inspection, appraisal, or title. 

### When will I get conditional approval? <br> 

Conditional approval happens after you have a signed purchase contract if you’re buying, have locked a rate, and your finances have been underwritten by an underwriter. 

### How to get a conditional approval? <br> 

Conditional approval is a standard step in the mortgage underwriting process. In order to get a conditional approval, you will apply for a mortgage, lock a rate, and start underwriting. 

### Is my conditional approval final? <br>

Same as with a verified approval, a conditional approval is not a guarantee you will get the loan and is still contingent upon a successful appraisal and title search. During this period, it’s crucial that you maintain your finances and avoid taking out any lines of credit or loans. 

<br>
<div style= "background-color:#F0F7F1;padding: 24px 42px; color:#292B29; border-radius: 12px"  >
<h3 style="font-weight:bold;">One Day Conditional Approval
</h3>
<p>
Conditional approval can take weeks with traditional lenders. At Better Mortgage, we deliver you a conditional approval via a commitment letter in as little as 24 hours with <a style="color:#292B29; white-space:nowrap;" href="https://better.com/b/one-day-mortgage"> One Day Mortgage</a>.²
</p>
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## Pre-approval vs verified approval vs conditional approval <br>
![Mortgage pre-approval vs verified approval vs conditional approval table comparison](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F1e9290023cfa4b2ca59f33fc20842057) 

## Start the mortgage approval process today <br>

At Better Mortgage, we’ve built technology that no other lender has, to deliver our customers mortgage approvals faster than anyone else we’ve seen. 

<li>  3 minute pre-approval: Get your pre-approval letter and custom rates online without any impact to your credit </li>
<li> One Day Verified Approval: Make competitive offers by getting an underwritten approval in 24 hours¹ </li>
<li> One Day Mortgage: Go from accepted offer to binding conditional approval via a mortgage commitment letter in one day²</li>


 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/start">Get pre-approved today</a>  
 </div>

<p class="legal" style="margin-top: 40px">  Disclaimer: This post does not constitute an endorsement or recommendation of Better Mortgage Corporation; Better Real Estate, LLC; Better Cover, LLC; Better Settlement Services, LLC; or their services. Better Cover is solely responsible for homeowners insurance services. Better Mortgage is solely responsible for making all credit and lending decisions with respect to mortgage loans. 
<br>
 ¹ <a class="textlink" href="https://better.com/b/One-Day-Verified-Better-Approval-Letter-Terms-and-Conditions"> See One Day Verified Approval terms and conditions </a> 
<br>
²Better Mortgage’s One Day Mortgage promotion offers qualified customers who provide certain required financial information/documentation to Better Mortgage within 4 hours of locking a rate on a mortgage loan the opportunity to receive an underwriting determination from Better Mortgage within 24 hours of their rate lock. The underwriting determination is subject to customary terms, including fraud and anti-money laundering checks, that take place pre-closing and which may trigger additional required documentation from the customer. Better Mortgage does not guarantee that initial underwriting approval will result in a final underwriting approval. <a class="textlink" href="https://better.com/with/one-day-mortgage-terms"> See One Day Mortgage Terms and Conditions. </a>

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Explore pre approval, verified approval, and conditional approval stages, what lenders verify at each, and how faster approvals strengthen home bids today.

Mortgage approvals: from pre-approval to conditional

Blog post image for Mortgage approvals: from pre-approval to conditional

![Purple Image with an Ellipse with the Front of a Condo Within and a Half Golden Circle to the Right](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2F4e50b45919444ef781f46d18a8f88d08)

# Discover how FHA condo approvals work, including loans and eligibility criteria. 

Dive into our blog for all the details.

## What is FHA condo approval and why is it necessary?

FHA condo approval is a certification process that allows condominium projects to become eligible for FHA-insured loans. It ensures that the condo project meets certain standards and requirements, providing assurance to lenders and buyers that the property is financially stable and a good investment.

 <br>
  <div class="learn">
<p class="learnfont"><strong>What You’ll Learn</strong></p>

<p class="learnfont">The kinds of condos you can buy with an FHA loan</p>

<p class="learnfont">How to qualify for an FHA loan</p>

  <p class="learnfont">What to do if the condo you want isn’t FHA approved</p>

  </div>
  <br><br>

If mowing the lawn, cleaning the gutters, or washing windows isn’t your idea of a fun weekend activity, a condo may be the right home for you. Condos typically cost less than single-family homes, you’re only responsible for maintaining the interior, and they’re often located close to amenities. In fact, larger condominium neighborhoods may even have shared amenities such as swimming pools, pet parks, and even golf courses. If you’re a homebuyer with a smaller down payment, lower credit score, or higher DTI, an FHA loan could be the way to make homeownership happen. Additionally, condo owners pay condominium association dues for the upkeep of shared common areas, such as garages, pools, outside hallways, gyms, and clubhouses.
Before you make the big decision to let a specific condo steal your heart, it’s important to know about the FHA condo approval process. Not all condos are available to homebuyers with an FHA loan because FHA loans are insured by the Federal Housing Administration (FHA) and there are strict payment requirements for the kinds of condos the FHA will approve. If a condo doesn’t make the FHA’s list, you won’t be able to buy it with an FHA loan. So let’s dig into which condos are FHA approved, how to get an FHA loan, and what to do if the condo you want isn’t on the FHA’s list.

## What is an FHA approved condo?

For a condo to be approved for an FHA loan it must be on the FHA’s list of approved condominium projects. To make the FHA’s approved condo list a condo must meet 3 basic requirements:

- It must be **primarily residential**.
- It must contain at least **two dwelling units**.
- It must be either **detached, semi-detached, a row house, a walk-up, mid-rise, high-rise**, including those with or without an elevator, or manufactured housing.

[In 2019, there were 150,000 condominium projects across the country, but only 6.5% of them qualified for FHA financing](https://www.spglobal.com/marketintelligence/en/news-insights/trending/_rm_ulplkwzhn1akd2gm8a2). Since then, new rules have been introduced to enable individual condo units to be eligible for FHA loans even if the full condo development isn’t approved. This is to increase the number of FHA approved units by up to 70,000 new units per year. Under the new rules, the FHA loan approval process evaluates the entire condominium project, not just the individual unit. Single condos within projects that are not approved can now be approved through a single-unit approval process sometimes called “spot approval.” The FHA loosened its eligibility requirements for condo owners in 2019, allowing individual condo units, including manufactured homes, to be eligible for FHA loans even if the full development isn't approved. This change, known as "spot approval," has opened up more opportunities for condo buyers to secure FHA financing.

Despite the new guidelines, “Condo hotels,” timeshares, houseboat projects, or condos that feature more than one dwelling in a single condominium unit are ineligible for homebuyers who need FHA financing.

## How to find out if a condo is FHA approved

The U.S. Department of Housing and Urban Development (HUD) maintains [this list](https://entp.hud.gov/idapp/html/condlook.cfm) of condominiums that are approved for an FHA condo loan.

To search for FHA approved condos you’ll need the state, county, and maybe the zip code (if you’d like to narrow your search to a more specific area). The list includes condominium projects that are approved, expired, rejected, or withdrawn, so select ‘approved’ status to make sure the condo you’re interested in can be financed with an FHA loan.

If a condo has already caught your eye, all you need is the condo name and state to see if it’s on the list. Alternatively, you could work with an experienced [real estate agent](https://better.com/realestate) who’s familiar with both FHA approved condos and the neighborhood where you’re hoping to buy.

## How a property gets approved for an FHA condo loan

As a homebuyer, this is more of a nice-to-know because no matter how much you want to buy a condo that’s not on the FHA approved condo list, it’s not your responsibility to get the condo FHA approved. The condo developer or their agent is typically responsible for getting their condominium project FHA approved. If the condo has been around for a while, the condo association or their management company submits the condo approval package. Additionally, it is important to note that the condo’s homeowners association (HOA) must have at least 10% of its HOA budget in a cash reserve to meet FHA requirements for commercial use.

If you want to learn about what goes into a condo approval package, or would simply enjoy some “light bedtime reading,” this 95-page [Condominium Project Approval and Processing Guide](https://www.hud.gov/sites/documents/11-22MLGUIDE.PDF) covers all the documentation and requirements the FHA needs to approve a condominium project.

Here are the highlights:

- The condominium project must have adequate insurance coverage
- Commercial space must not be more than 25%, up to a maximum of 55%, 35% of the project’s total floor space, depending on the project. 
- No more than 10% of the total units can be owned by one investor
- The project’s area structures, as well as the housing units themselves, must be complete
- Bylaws and covenants of the condominium must not violate the [Fair Housing Act](https://www.hud.gov/program_offices/fair_housing_equal_opp/fair_housing_act_overview)
- Condos, aka ‘condotels’, that double as a resort-type property are prohibited
- The project must be located a reasonable distance away from transportation infrastructure
- At least 50% of the units must be owner-occupied
- No more than 15% of units in the property can be behind on their homeowners association dues
- The project must have adequate capital reserves

As you can imagine, it can be time-consuming and often costly to get a condo project FHA approved and that’s why most condominium projects forgo FHA approval. Instead, they’re built in the hope that buyers use a [conventional loan](https://better.com/content/conventional-loan-requirements/) to finance their condo purchase.

## FHA condo requirements

There isn’t a specific FHA mortgage condo loan per se. You’ll need to be approved for an FHA mortgage loan and find a condo to buy on the FHA approved condo list. FHA mortgage loans have specific requirements for the types of residences you can buy, so you’ll be pleased to know that if you want an FHA-approved condo to be your primary residence, the property will automatically meet FHA mortgage loan requirements. However, it's important to note that investment properties and vacation homes are not eligible for FHA loans.

To be eligible for an FHA home loan you’ll typically need (keep in mind some requirements may vary by lender):

__A.__ A credit score within the eligibility range based on your down payment amount or even your lender’s specific requirements:

  1. If your down payment is 3.5%–9.9%, you’ll need a credit score above 580

  2. If your down payment is 10%, a credit score between 500–579 will suffice

  3. If applying through Better Mortgage, credit score of at least 580 is required to qualify

__B.__ A [debt-to-income (DTI)](https://better.com/content/3-most-important-numbers-mortgage-application/) ratio of 43% or less

__C.__ Evidence of steady income and proof of employment

__D.__ To make [mortgage insurance premium](https://better.com/faq/home-purchase-loan-costs/what-is-mortgage-insurance-premium-mip) (MIP) payments, in most cases for the life of the loan in most, plus a one-time upfront MIP payment equal to 1.75% of the loan amount


MIP is similar to [private mortgage insurance (PMI)](https://better.com/content/what-is-pmi-or-private-mortgage-insurance/), which borrowers with [conventional mortgages](https://better.com/content/conventional-loan-requirements/) need to pay if their down payment was less than 20%. Conventional mortgage borrowers will automatically stop paying PMI once they’ve reached 22% equity in their home (when they have 20% equity in their home, they can request an end to PMI). MIP, on the other hand, must be paid for the life of most loans. If your down payment is more than 10%, however, you can ask for MIP to end after 11 years of payments.

FHA [home loan requirements](https://better.com/content/conventional-loan-requirements) also allow borrowers to make down payments using gifted money from family or a friend. In this case, a [gift letter](https://better.com/content/how-to-use-a-gift-letter-for-your-mortgage/) will need to accompany the mortgage application to prove that the gift does not need to be paid back.

A range of [mortgage lenders](https://better.com/mortgage) offer FHA home loans and their eligibility requirements may differ. At Better Mortgage, for example, you’ll need a DTI ratio of 50% and a minimum credit score of 580 regardless of your down payment amount.*

## If the condo you want isn't FHA approved, you have options

While there’s no harm in asking if the condo developer or condo association can submit their condo for FHA approval, given that it can take from two weeks to over three months to get an FHA condo approval, it’s unlikely you’ll get a satisfactory result that works with your homebuying timeline.

If you know you’ll need to get an FHA home loan to buy a home, you’ll need to keep looking until you find a condo on the FHA approved condos list or consider buying a single-family home instead.
If an FHA loan does not sound right for you, you’re in luck! You may be eligible for a conventional loan with Better Mortgage. In fact, qualifying first-time homebuyers can get a conventional mortgage with a down payment as low as 3%. As an added bonus, you’ll no longer be limited to buying a condo that’s approved by the FHA. Additionally, if you’re eligible for the Fannie Mae HomeReady program, you may be able to snag a condo with a 3% down payment. However, to qualify for this program, you'll need at least a 620 credit score and income limits will apply.

In as little as 3 minutes, Better Mortgage can show you which types of loans you may qualify for, the homebuying budget you’ll have to work with, and they will match you with a loan consultant to walk you through your options to help you make the best financial decision for you and your family.

<br> <br>

 <div style="text-align: center">  
 <a class="bet-Button bet-Button--xl bet-Button--primary" href="https://better.com/preapproval/nxt-purchase?utm_source=website&utm_medium=webpage&utm_campaign=blog&utm_content=fha-condo-approval">Get started</a>  
 </div>

 <p class="legal">*Eligibility is subject to change.</p>

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Learn about FHA condo approval requirements for buyers, including eligibility rules, documentation needed, and how to find FHA-approved condominium projects.

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