This short guide will give you a clear road map to avoid issues when using FHA financing for condos. Many of these rules also apply when putting less than 25 percent down on a condo using conventional financing for a primary residence or a 30 percent down payment on a second home.
- Condo bylaws often contain a right of first refusal in Declarations.
- Too many investors can be problematic; the FHA now allows up to 50 percent of the total units in the condo to be owned by a single investor or entity -- as long as the other half are owner-occupied as principal residences.
- It's vital to make sure the building has adequate insurance coverage including fidelity bond and flood insurance.