Did you know that financing a condo is different than financing a regular home or a townhouse/PUD? 

There is an extra step involved and that is to make sure the condo project is satisfactory.  And this isn't obvious because depending upon the type of loan that you are getting the requirements are different. 

For FHA financing, the condo association should be approved by HUD.  To determine if it is approved by HUD you can look it up on their website at https://entp.hud.gov/idapp/html/condlook.cfm.  All FHA/HUD approved condos will appear on their site.  IF it isn't FHA approved you most likely will have to either switch your financing type or find a different property.  Additionally, just because it is on their site as being approved doesn't automatically mean it is eligible for FHA financing.  The lender will also require some additional information to make sure it still meets FHA guidelines.

VA is similar to FHA.  To determine eligibility it will have to appear on the approved list on the VA website and the lender has to confirm that it still meets their guidelines.  The website address is https://vip.vba.va.gov/portal/VBAH/VBAHome/condopudsearch.

For Conventional loans there are two types of review/approval process.   The condo association will either have to go through a limited review or a full review.  As the names indicate, the limited review is an easier and faster process while the full review requires additional documentation which means the condo association is subject to further scrutiny.  What determines the type of review is based on occupancy type, what % you are putting down, as well as whether the condo is considered established. If you are buying this property as an investment property a full review is required.  If you are putting at least 20% down then only a limited review will be necessary.  Freddie Mac allows for the limited review with only 10% down so be sure to ask your loan originator if they can do Freddie Mac loans (Fannie Mae and Freddie Mac write most of the rules for conventional loans).  Lastly, if the condo project is considered new a full review will be required regardless of % of down payment.  Fannie Mae defines new as a project where any of the following characteristics exist:  fewer than 90% of the total units in the project have been conveyed to unit purchasers; the project is not fully completed; the project is newly converted; or the project is subject to additional phasing. 

Once it is determined the type of review which is necessary your lender will require a checklist of items to review to determine if they are able to lend on it.  If the lender won't lend on the condo project it is because they have determined that the project is non-warrantable (meaning doesn't meet the criteria of Fannie Mae or Freddie Mac).  If this occurs you will need to find a lender that will lend on non-warrantable condos.  This can provide to be difficult and usually will result in a greater down payment and sometimes a higher interest rate. 

It is not uncommon when obtaining conventional financing that the lender can't determine if it's warrantable until they are several weeks into underwriting the file and have an appraisal.  For this reason, it is imperative that you are working with a mortgage originator who is experienced in financing condos as they can usually vet out any potential financing issues early in the process and oftentimes before you have spent money on an inspections or an appraisal.