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FHA Loan Property Requirements — What Homes Qualify?

Before you fall in love with a property, it’s worth knowing whether FHA financing will work for it. Not all homes qualify, and some property types have specific requirements.

Eligible Property Types

  • Single-family homes (SFR) — detached or attached
  • 2–4 unit residential properties (duplex, triplex, fourplex) — borrower must occupy one unit
  • Planned Unit Developments (PUDs) and townhomes
  • FHA-approved condominiums — must be in an FHA-approved project or qualify under Single Unit Approval (SUA)
  • Manufactured homes — must meet specific HUD requirements (see below)

Condos — Special Rules

Condominiums are eligible under two pathways:

  1. FHA-approved condo project: The entire complex is on HUD’s approved list — the standard route
  2. FHA Single Unit Approval (SUA): For condos in projects not on the FHA list, an individual unit may qualify if the project meets certain criteria (owner-occupancy ≥ 50%, FHA concentration ≤ 10%, minimum 5 units)

Co-ops, condotels, and hotel/motel conversions are ineligible.

Manufactured Homes — Requirements

  • Built on or after June 15, 1976 with HUD certification label affixed
  • Minimum 400–600 sq ft floor area depending on lender
  • Permanently affixed to a foundation and classified as real property
  • Fee simple ownership in most cases
  • Single-unit only; cannot have been previously installed at another site

Ineligible Property Types

  • Mobile homes (pre-HUD code, before June 15, 1976)
  • Co-ops
  • Commercial properties
  • Working farms, orchards, and ranches
  • Marijuana-producing properties
  • Vacant land only (no structure)
  • Properties in Coastal Barrier Resource System (CBRS) zones

FHA Appraisal — Condition Standards

Every FHA property must pass an FHA appraisal that evaluates both value and condition. Common items that can flag issues:

  • Peeling paint in homes built before 1978 (lead paint concern)
  • Missing handrails, broken windows, exposed wiring
  • Water damage or roof problems
  • Health and safety hazards

Flagged conditions must typically be repaired before the loan can close.

Practical Takeaways

  • SFR, 2–4 units, townhomes, and FHA-approved condos are eligible
  • Manufactured homes eligible with HUD certification and permanent foundation
  • Condos in non-approved projects must pass SUA criteria
  • FHA appraisal covers both value and property condition — plan ahead for older homes