What must a condo meet in order to be purchased with an FHA loan?

For a condominium to be eligible for purchase with an FHA loan, it must be located within a development that is part of an FHA-approved association. This requirement ensures that the condominium project meets certain standards and guidelines set forth by the Federal Housing Administration (FHA). These standards are designed to protect buyers and ensure the long-term viability of the property and the association.

FHA approval typically involves assessing the financial stability of the condominium association, the percentage of units that are owner-occupied versus rented, and various aspects of the project’s management and overall condition. By ensuring that the condo is in an FHA-approved association, the FHA mitigates risks associated with lending to projects that may not be well-managed or financially sound.

The other choices do not represent FHA guidelines necessary for eligibility. The FHA does not impose a price cap like $150,000, nor does it set specific requirements regarding the year of construction or the square footage of the unit for eligibility. These factors are not the primary concern; instead, the focus is on the approval status of the condominium association as a whole.