Cardinal Financial News

FHA “Spot Approval” Is Back

twitter linkedin facebook
FHA “Spot Approval” Is Back
Industry - October 21, 2019

Don’t look now, but condos just got cooler. The Federal Housing Administration has finally issued a long-awaited update to its condominium rules by announcing that it will now allow “spot approval” on individual units and is taking further steps to loosen requirements that make these properties eligible for FHA financing. Effective for case numbers assigned on or after October 15, 2019, Cardinal Financial is aligning with FHA’s updates to condos. Our project review for FHA condominiums will follow the FHA’s requirements for approving condos and condo projects, and these changes are estimated to qualify 20,000 to 60,000 more units for FHA financing.

In addition, the following notable changes to the current condo policy have been made:

  • Extending the recertification deadline for approved condo projects from two to three years.
  • Approved projects can now have up to 35% of their square footage dedicated to non-residential use.
  • Eligible condo projects can now be just 50% owner-occupied.
  • HUD will insure up to 50% of the units in a project.

The new Single-Unit Approval process (previously known as a “spot approval” until revoked in February 2010) will allow units in eligible projects that are not currently FHA approved to be eligible for FHA financing, provided that:

  • The unit is in a completed project, and
  • For condominium projects with 10 or more units, no more than 10% of individual condo units can be FHA insured, and projects with fewer than 10 units may have no more than two FHA-insured units.

HUD is still working on the specific details for the processing times and procedures for the spot approvals, but it’s important to know that extra processing time will be required for loans on a unit within an unapproved project. This will be a manual process until the FHA gets a handle on automatically tracking the FHA-insured mortgage concentration on unapproved projects.

We’re excited about this new change because it opens up more inventory for potential condo buyers across the country. Got your eye on a condo you love? You might be eligible for FHA financing! Find out today by filling out our free quote form.

About Cardinal Financial

We started Cardinal Financial with a passion for developing a better mortgage experience. Our proprietary loan origination software, Octane®, is a sure advantage, but we soon found out that revolutionary technology only goes so far without revolutionary people. We place a premium on hiring talented, forward-thinking, entrepreneurial spirits who are committed, not only to reimagining the possibilities of mortgage lending, but to delivering a personal experience to every borrower every time. We take a tremendous amount of pride in our people because they’re what sets us apart from the rest. Our culture is strengthened by self-starters who look forward to coming to work every day and are willing to go the extra mile for their colleagues and their clients. Cardinal Financial is where your career meets your calling. Join us and be a part of something more than mortgage lending. For more information about Cardinal Financial, visit or follow us on social media: and @CardinalFinancial on Instagram.