FHA Condo | 234c Mortgage Loan
234c mortgage loan provides FHA insurance to borrowers who purchase a unit in a condominium building.
FHA 234c loan features:
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The condominium building must contain at least four dwelling units and can be detached or semidetached, a rowhouse, a walk-up, or an elevator structure
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If the apartment is in a building that was converted from rental housing, no insurance may be provided unless the conversion occurred more than one year before the application for insurance, the potential buyer or co-buyer was a tenant of that rental housing or the conversion of the property is sponsored by a tenant's organization that represents a majority of the households in the project.
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Eighty percent of FHA-insured mortgages in the project must be made to owner-occupants.
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Many closing costs can be financed into your FHA mortgage loan. With most conventional mortgages, the borrower must pay, at the time of closing, costs equivalent to 2-3 percent of the price of the mortgage loan. By allowing the borrower to finance many of these charges, the borrowers upfront costs are reduced significantly when buying a home.
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FHA rules put limits on some of the fees charged by your lenders. For example, the mortgage origination fee charged by the lender may not exceed 1 percent of the amount of the mortgage and the tax service fee is not allowed on the 234c mortgage loan.