FHA Condo Approval in Chicago: Check a Building and Qualify

Last reviewed: October 31, 2026 · Chicago Condo Loans Editorial Team · How we research

Quick answer To use an FHA loan on a Chicago condo, the building must be on HUD’s list of FHA-approved condominiums, or your lender must get the individual unit approved through FHA’s single-unit approval. You can check a building’s status for free on HUD’s condo search. In 2026, the most you can borrow with an FHA loan on a one-unit property in Cook County is $541,287, and the minimum down payment is 3.5% with a credit score of 580 or higher.

This is part of our complete guide to condo loans in Chicago. Buying your first home? Our first-time condo buyer checklist puts the financing steps in order. Using a VA loan? An FHA-approved condo isn’t automatically VA-approved. Buying a townhome? It may be a site condominium or a PUD, which changes the approval rules.

Two ways to get FHA approval

Detail	FHA project approval	FHA single-unit approval
What’s approved	The whole building	Just the unit you’re buying
Who requests it	Usually the association or its management company, through an FHA lender or consultant	Your lender, during your loan
How long it lasts	3 years, then the building must be recertified	Your loan only
Building size	Any eligible condo project	At least 5 units
FHA loan cap	A limit on the share of units with FHA loans applies	In buildings of 10 or more units, no more than 10% of units can be FHA-insured; in buildings under 10 units, no more than 2
Best for	Buildings that want to attract FHA buyers long-term	Buyers whose building isn’t on the list but otherwise meets FHA standards

Based on HUD’s 2019 condominium final rule and Single Family Housing Policy Handbook 4000.1.

How to check if a Chicago condo is FHA-approved

Go to HUD’s FHA-approved condominium search.
Search by state (IL), city (Chicago), and the building’s name or ZIP code. Buildings are often listed under their legal association name, which may differ from the building’s common name. Your 22.1 disclosures or the declaration will show the legal name.
Check the status and expiration date. Only an “Approved” status that hasn’t expired counts. “Expired,” “Withdrawn,” or “Rejected” means the building isn’t currently approved.
If the approval expires before your closing, ask the association whether it has started recertification.
If the building isn’t listed, ask your lender whether single-unit approval is possible.

What FHA requires of a condo building

Whether for project approval or single-unit approval, HUD looks at the building’s finances, occupancy, and legal setup. Key standards:

Owner occupancy: at least 50% of units owner-occupied for established buildings (complete and over a year old) and for single-unit approval. HUD sets 30% for new construction, gut rehabs and projects under a year old, 75% for two- to four-unit projects, and can accept 35% to under 50% by exception if no more than 10% of units are more than 60 days behind on association fees. Once a building is approved, at least 35% owner occupancy is needed when each loan is approved (HUD FHA knowledge base, KA-02392).
Reserves: the reserve account must be funded with at least 10% of the monthly unit assessments, unless HUD accepts a lower amount based on a reserve study completed within the past 36 months (24 CFR 203.43b(d)(6)(x)). This is measured differently from Fannie Mae’s conventional test, which looks at the association’s budget.
Delinquent dues: FHA limits the share of units more than 60 days behind on assessments; the lender reports the count on HUD’s condo questionnaire (HUD-9991 or HUD-9992). For comparison, Fannie Mae allows no more than 15% (Selling Guide B4-2.2-01).
Single-owner concentration: FHA limits how many units one person or entity can own; the lender checks this on HUD’s condo questionnaire.
Commercial space: no more than 35% of the building’s total floor area (HUD News Release 19-121, August 14, 2019; the regulation lets HUD set the limit between 25% and 55%, 24 CFR 203.43b(d)(6)(vii)).
Insurance: adequate hazard, liability, and fidelity coverage, plus flood insurance if the building is in a flood zone.
Litigation and financial distress: lawsuits and events such as a bankruptcy or foreclosure involving the association must be disclosed and explained.
Legal documents: recorded declaration and bylaws that comply with Illinois law and don’t contain restrictions FHA prohibits.

For single-unit approval, the lender uses HUD’s condo questionnaire (form HUD-9991) along with the budget, insurance documents, and legal documents. Delays in getting the questionnaire back from a management company are one of the most common reasons FHA condo purchases slow down.

FHA vs. conventional for a Chicago condo

Detail	FHA	Conventional
Minimum down payment	3.5% (credit score 580+)	3%–5% for a primary residence, depending on program
2026 Cook County loan limit (1 unit)	$541,287	$832,750
Mortgage insurance	Upfront premium of 1.75% of the loan (can be financed) plus an annual premium, commonly 0.55% for a typical 30-year loan with less than 5% down	Private mortgage insurance if under 20% down; can be removed as equity grows
Mortgage insurance duration	Life of the loan with less than 10% down; 11 years with 10% or more down	Typically removable around 20%–22% equity
Building approval	FHA project or single-unit approval	Warrantable under Fannie Mae or Freddie Mac rules
Credit flexibility	More flexible on credit scores	Pricing improves with higher scores

Mortgage insurance terms per HUD policy in effect in 2026; your lender will quote exact costs.

Price ceiling example: with the minimum 3.5% down, the $541,287 FHA limit means the highest purchase price you could finance is about $560,900 before the upfront mortgage insurance premium. Above that, you’d need a bigger down payment or a conventional loan (and above $832,750, a jumbo loan).

The two systems are independent. A building can be FHA-approved but non-warrantable for conventional loans, or the reverse. See warrantable vs. non-warrantable condos.

Why some Chicago buildings aren’t FHA-approved

The approval lapsed. Project approvals last three years. Some associations don’t recertify, often because no one on the board is tracking it.
Too many renters. An established building below 50% owner occupancy misses FHA’s standard; 35% to under 50% can work only by exception, and below 35% it can’t qualify.
Thin reserves or high delinquencies. The same financial issues that trouble conventional lenders.
The board never applied. Approval is voluntary, and some associations don’t pursue it.
Too small for single-unit approval. Buildings with fewer than 5 units can’t use single-unit approval.

If you own in a building that isn’t approved, raising FHA approval with your board can widen the pool of buyers when you sell.

Frequently asked questions

Can I get an FHA loan on a condo that isn’t on HUD’s list?

Possibly, through single-unit approval, if the building has at least 5 units, meets FHA’s standards, and hasn’t already reached its cap on FHA-insured units.

How long does FHA single-unit approval take?

It depends mostly on how quickly the association returns the questionnaire and documents. Build extra time into your financing contingency.

Is an FHA-approved condo also VA-approved?

No. FHA and VA approvals are separate. Check each program’s list.

What’s the maximum FHA loan for a Chicago condo in 2026?

$541,287 for a one-unit property in Cook County, per HUD Mortgagee Letter 2025-23.

Does the August 2026 Fannie Mae change affect FHA loans?

No. The end of limited review applies only to conventional loans sold to Fannie Mae and Freddie Mac.

Sources

Educational content only, not lending or legal advice. See our Disclaimer.