A condo project is established if: at least 90% of the total units in the project have been conveyed to the unit purchasers; the project is 100% complete, including all units and common elements; the project is not subject to additional phasing or annexation; and control of the homeowners' association has been turned over to the unit owners.

For established projects: At least 51% of the total units in the project must be conveyed to purchasers as principal residences or second-homes. At least 90% of the total units must have been conveyd to the unit purchasers.The developer may not retain ownership in any of the facilities related to the project.

A condo project is new if: fewer than 90% of the total units in the project have been conveyed to the unit purchasers; the project is not fully completed, such as proposed construction, new construction, or the proposed or incomplete conversion of an existing building to a condo; the project is newly converted; or the project is subject to additional phasing or annexation.

For new projects: At least 70% of the total units in the project must have been conveyed or are under a bona fide contract for purchase. Individual units must be available for immediate occupancy at the time of the loan closing. 

The HOA budget must: be adequate, provide for the funding of replacement reserves for capital expenditures and deferred maintenance equal to at least 10% of the budget, provide adequate funding for insurance deductibles

No more than 20% of the total square footage of the project can be used for commercial purposes.

No more than 15% of the total units in an attached condo project can be 30 days late on the payment of their condo/association fee payments.

The project must be covered by hazard, flood, liability, and fidelity insurance (if applicable). Fidelity insurance is required for condo projects consisting of more than 20 units.

Unless the master policy covers the unit's interior, the borrower must obtain a "walls-in" or HO-6 policy. This policy must provide coverage in an amount no less than 20% of the condo's appraised value.

Fannie Mae will continue to purchase FHA-insured loans secured by condo units located in FHA-approved projects.

No single entity may own more than 10% of the total units in the project.

Projects are considered ineligible where the homeowners' association is named as a party to current litigation or the developer is named as a party to current litigation that relates to the project.
    
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