FHA and VA Loans for NYC Condos and Co-ops

You can use an FHA or VA loan for an NYC condo, but usually only if the building is on the government's approved list or the single unit qualifies on its own, and few Manhattan or Brooklyn condo buildings are on those lists. For co-ops, FHA and VA financing is rare in practice, so most co-op buyers who need a low down payment end up with a conventional share loan plus help such as HomeFirst.

This guide explains why the approval step exists, how to check a specific building in five minutes, and what to do when the apartment you love isn't approved.

Why government loans need the building approved, not just you

When you buy a house, the lender looks at you and the house. When you buy a condo, your unit's value also depends on the whole building: its budget, reserves, insurance, lawsuits, how many owners live there and how many are behind on common charges. FHA (insured by the Department of Housing and Urban Development) and VA (guaranteed by the Department of Veterans Affairs) both protect themselves by reviewing the building as a "project" before they back loans in it.

HUD's condominium rule, effective October 15, 2019, sets the main tests for an approved FHA condo project. According to HUD's announcement of the rule:

• Owner occupancy: most projects need at least 50% of units occupied by owners.
• FHA concentration: FHA will insure loans on no more than 50% of the units in an approved project.
• Commercial space: commercial and other non-residential space generally can't exceed 35% of the floor area.
• Recertification: approval must be renewed every three years (it used to be two).

Many NYC condo buildings never apply. Approval takes paperwork from the condo board or managing agent, and a building full of cash buyers and investors has little reason to bother. Newer buildings with many investor-owned or rented units can also struggle with the owner-occupancy test.

How to check whether an NYC condo is FHA-approved

1. 1

   Open HUD’s FHA Condominium search

   It is at entp.hud.gov/idapp/html/condlook.cfm. Set State to New York and type the county (New York for Manhattan, Kings for Brooklyn, Queens, Bronx, Richmond for Staten Island). Fewer fields return a longer list.
2. 2

   Search by a partial name, then by ZIP

   FHA may list a building under its legal condominium name, not the marketing name on the listing. Try a fragment of the street address or name, and fall back to the ZIP code.
3. 3

   Read the status

   The search lets you filter by Approved, Expired, Rejected or Withdrawn. Only a current Approved status lets a lender close an FHA loan under project approval. Click the condo name for the details page and its dates.
4. 4

   If it isn’t approved, ask about single-unit approval

   HUD’s help page says projects with a status of Expired, Rejected or Withdrawn can still be considered for single-unit approval. Ask an FHA lender before you sign a contract.
5. 5

   Repeat for VA

   VA keeps its own list. Search the VA Condo Report on the VA LGY Hub (lgy.va.gov/lgyhub/condo-report). VA approval and FHA approval are separate; a building can have one and not the other.

Single-unit approval: the workaround for unapproved buildings

Since the 2019 rule, FHA can insure a loan on an individual unit in a condo project that is not approved. HUD's help page says the project must be ready for occupancy and have at least five units, and it can't be manufactured housing. HUD set caps so a building can't fill up with FHA loans this way:

• In projects with 10 or more units, no more than 10% of the units can have FHA-insured loans.
• In projects with fewer than 10 units, no more than two units can be FHA-insured.

Single-unit approval still requires the lender to review the building's documents (budget, insurance, litigation, occupancy). The lender submits HUD's single-unit approval questionnaire (Form HUD-9991), not every lender offers it, and the condo's managing agent has to cooperate with questions. Expect extra time, and ask the listing agent early whether the building has ever had an FHA or VA buyer.

Co-ops: why FHA and VA rarely work

A co-op buyer doesn't buy real estate. You buy shares in a corporation plus a proprietary lease, and the loan is a "share loan" secured by those shares (see co-op share loans vs mortgages). HUD's condo project approval process and lookup cover condominiums, not cooperatives, and HUD's FHA overview describes the program as available on 1–4 unit properties without mentioning co-ops.

On the VA side, federal law lists buying a condo unit in an approved project as an eligible use (38 U.S.C. § 3710(a)(6)). A separate paragraph added in 2006, § 3710(a)(12), allows loans to buy stock or membership in a cooperative housing corporation, but as published it covers loans guaranteed within five years of December 22, 2006. VA's current purchase-loan page lists condos in VA-approved projects and does not mention co-ops. If you are a veteran set on a co-op, ask a VA-approved lender directly whether it can do one today, and get the answer in writing.

There's a second barrier: the board. Many NYC co-op boards set their own minimum down payment and post-closing liquidity rules, often well above 3.5%. Even if a loan were available, the board can still say no. See co-op financial requirements.

What to do if your building isn't approved

1. Ask the board or managing agent to apply. A condo can seek FHA project approval through an FHA lender with approval authority or through HUD. It takes time and board effort, so this rarely helps on a deal that needs to close in 60 days, but it can help the next buyer.
2. Try single-unit approval (FHA) with a lender that offers it, before you sign.
3. Switch to a conventional loan with a low down payment. Conventional loans can go below 20% down with private mortgage insurance. Compare costs with the PMI calculator and the FHA loan calculator, which shows FHA's upfront and annual premium.
4. Add down payment help. NYC's HomeFirst program offers up to $100,000 toward the down payment or closing costs for first-time buyers up to 120% of Area Median Income, and it can be used for a 1–4 family home, a condo or a co-op. Check the rules in our HomeFirst guide or with the HomeFirst checker.
5. Look at small houses and condos outside the core. An FHA or VA loan on a 1–4 family house doesn't depend on a project list. Read buying a two- to four-family house.

Common questions

Does an "Expired" status mean the building failed?

Not necessarily. Approval lasts three years and must be recertified. Many buildings simply let it lapse. Either way, an expired building isn't approved for new FHA loans until it recertifies, though single-unit approval may still be possible.

Is a new development condo eligible?

Single-unit approval is for units in projects that are ready for occupancy and have at least five units. For a building still under construction or selling out, ask the sponsor whether it has, or is seeking, FHA or VA approval. See buying a new development condo.

Will FHA cover the full price of an expensive apartment?

FHA has county loan limits, and higher-priced NYC apartments can exceed them. Check the current limit for your county on HUD's FHA mortgage limits lookup before you count on FHA, and compare with the conforming loan limit checker.