Updated November 4, 2026
You can use an FHA loan on a Kentucky condo in two ways: the whole project is FHA-approved, or your individual unit qualifies for Single-Unit Approval. A condo that isn’t on FHA’s list isn’t automatically ruled out.
Step 1: Check Whether the Project Is FHA-Approved
Search HUD’s FHA-approved condo list by location, name or status. If the project is approved and its approval is current, the project review is already done. Approvals can expire, so look at the status, not just the name. If the project isn’t approved, move on to Single-Unit Approval.
Step 2: See If the Unit Qualifies for Single-Unit Approval
Single-Unit Approval replaced the old “spot condo” approach. It lets one unit in a non-approved project qualify, as long as the project meets these standards:
| Requirement | FHA standard |
|---|---|
| Project approval status | Not on the FHA-approved list when the case number is assigned |
| Project size | At least 5 units |
| Completion | Certificate of occupancy issued at least 1 year ago, or the project has been occupied |
| Manufactured homes | Not eligible |
| Owner occupancy | At least 50% of units |
| FHA loans in the project | 10+ units: FHA may stop new case numbers above 10% of units. Under 10 units: no more than 2 FHA loans |
| HOA reserves | At least 10% of monthly assessments, unless a reserve study supports less |
| Past-due dues | No more than 15% of units in arrears |
| One owner’s units | 20+ units: 10% or less. Under 20 units: one unit per owner |
| Commercial space | No more than 35% of total floor area |
| Loan approval | Automated underwriting “Accept,” or a maximum 90% loan-to-value |
That last line matters. If your file doesn’t get an automated Accept and has to be manually underwritten, you would need at least 10% down on a Single-Unit Approval rather than the usual 3.5%.
What Usually Stops a Kentucky Condo
- Too many rentals. Condos near campuses and downtowns can fall under the 50% owner-occupancy line.
- Underfunded reserves. The HOA budget needs to show the reserve contribution.
- Delinquent dues. If more than 15% of units are behind, the project fails.
- Too few units. A project with two to four condo units doesn’t meet the five-unit minimum.
- An HOA that won’t respond. Your lender needs the HOA’s budget and project information to verify these items, so slow answers can hold up a closing.
What This Means for Your Offer
Have the condo checked before you get far into a contract. Ask the listing agent or HOA for the current budget, the number of units, how many are owner-occupied, and how many owners are behind on dues. Send that to me and we can usually tell quickly whether it looks workable.
The rest of the loan works like any other FHA purchase: the same credit, income and down payment rules and the same FHA mortgage insurance. Your monthly HOA dues count in your housing payment when your debt-to-income ratio is calculated, so a high fee can reduce how much you qualify for.
Frequently Asked Questions
Can I use an FHA loan on a condo that isn’t FHA-approved?
Often, yes. If the unit and project meet the Single-Unit Approval standards above, the project doesn’t need to be on FHA’s approved list.
What’s the down payment on a Kentucky FHA condo?
The minimum is 3.5% with a 580 or higher credit score, the same as a house. On a Single-Unit Approval without an automated Accept, the maximum is 90% loan-to-value.
Can I buy an FHA condo as a rental?
No. FHA loans are for a primary residence, and that applies to condos too.
Sources: HUD’s condominium mortgage insurance page and Handbook 4000.1, Single-Unit Approval section.
Found a Condo? Send It to Me Before You Offer
Call or text Joel Lobb at 502-905-3708, email kentuckyloan@gmail.com, or send me your question here.
Joel Lobb — Mortgage Loan Officer
NMLS #57916 | EVO Mortgage, Company NMLS #1738461
Equal Housing Lender. This information is for educational purposes only and is not a commitment to lend. All loans subject to credit approval, underwriting, property approval, and program guidelines, which can change without notice. Not affiliated with or endorsed by FHA, HUD, or any government agency.