Can a first time home buyer buy a condo?

Can a first time home buyer buy a condo?

As a first time homebuyer, you have the freedom to choose what type of home you want to purchase. One that might be a good fit is a condominium (condo). The condo market continues to increase and may expand the possible home options to choose from in your area.

What credit score do you need for a condo loan?

580
You’ll need a credit score of at least 580 to qualify for the program’s lowest 3.5% down payment. When you’re looking for condos, use the condominium search tool offered by the U.S. Department of Housing and Urban Development (HUD) to see if the project is approved, or has been submitted for approval.

What if a condo is not FHA-approved?

The new FHA condo rules apply to both purchases and refinances. So if you have been unable to refinance the mortgage on your condo because your project is not approved, you may be able to refinance with an FHA loan. The downsides of an FHA mortgage include mortgage insurance and loan limits.

How long does it take for FHA condo approval?

Getting a condo “FHA-approved” can take as little as two weeks or more than three months. Note that getting a condo FHA-approved is not the home buyer’s responsibility. Typically, the responsibility falls to the developer of the condo or an agent for the developer.

Can you buy a condominium with an FHA loan?

FHA loans are insured by the Federal Housing Administration, or FHA. They’re meant for first-time homebuyers or those who haven’t owned property in the last three years. An FHA-approved condo is a condominium that is eligible to be purchased with an FHA loan.

Is a condo a good first home investment?

When purchasing an investment property, a condo can be an attractive choice, especially to first-time investors. They generally cost less than single-family homes and can be easier to maintain.

Can I buy a condo with 5% down?

In addition, some lenders may require that you put at least 20 percent down on a condo as a minimum. Still, in other areas the down payment on a condo can be as little as 5 percent for those with excellent credit. FHA loans, as noted before, allow down payments of as little as 3.5 percent on condos.

How much should you put down on a condo?

How large of a down payment will you need for a mortgage on a condominium? The short answer is 3 percent to 20 percent of your unit’s purchase price, with 10 percent being common for those buyers who must rely on conventional loans to finance their units.

Why should a condo be FHA approved?

Generally speaking, buyers who use FHA loans are more likely to reside within the unit, and not rent it out. Conversely, condominiums without FHA approval will attract buyers that can make large down payments for conventional financing. These buyers are usually investors who will rent out the property for a profit.