By Alex Rodino, REALTOR® | Georgia real estate license #443565 | U.S. Army veteran
FHA single-unit approval allows a lender to seek FHA insurance for a loan on one unit in a condo project that is not on FHA’s approved list, if the project has at least five units, at least 50 percent owner occupancy and limited FHA concentration, and the loan gets a TOTAL Accept or stays at or under 90 percent loan-to-value if manually underwritten.
These are key checks, not the complete underwriting review. Upcoming, by November 10, 2026, Update 18 explicitly adds an existing free-assumability requirement to the single-unit checklist, with early implementation allowed. Before a buyer falls for a condo, I ask whether the project is FHA approved and, if not, whether the lender can consider single-unit approval.
What single-unit approval is
In brief: Single-unit approval gives a lender a route to review a condo in a project that is not FHA approved. Both the unit and the project must meet HUD’s requirements. Getting an FHA case number is a processing step, not a completed project approval or a promise of financing.
HUD defines single-unit approval in Handbook 4000.1, II.A.8.p.iii. Under subsection (A), the lender checks that the project is not on FHA’s approved condominium list when the case number is assigned. Under (D)(2), the lender completes the required documents and verifications at the loan level. That distinction matters when a listing simply says FHA financing is possible.
The single-unit checklist
In brief: The checklist below separates the borrower review from the project checks and shows what Update 18 changes. It covers the requirements discussed in this guide, not every underwriting requirement. Use it to organize questions for your lender, who must review the supporting documents and the full handbook.
| Requirement | Rule today | Changes by November 10, 2026? | Handbook section |
|---|---|---|---|
| Project approval status | The project must not be on FHA’s approved list at case-number assignment. | No change | II.A.8.p.iii(A) |
| Borrower review | The application must receive a TOTAL Accept or, if manually underwritten, have a maximum LTV of 90 percent. | No change | II.A.8.p.iii(B) |
| Project completion | A certificate of occupancy (CO) or equivalent is required for all units in the complete project or complete legal phase. | No change | II.A.8.p.iii(C) |
| Subject unit | The subject unit needs a CO or equivalent issued at least one year ago, or it must have been occupied. | No change | II.A.8.p.iii(C) |
| Project size | At least five units. | No change | II.A.8.p.iii(C) |
| Manufactured home | Must not be a manufactured home. | No change | II.A.8.p.iii(C) |
| Ineligible characteristics | Must not have HUD’s ineligible characteristics. | No change | II.A.8.p.iii(C) |
| Approved project or phase | Cannot be an approved project or an unapproved phase of a project with an approved legal phase. | No change | II.A.8.p.iii(C) |
| Free assumability | Required today by II.A.1.b.v. | Update 18 adds it to this checklist. | II.A.1.b.v; II.A.8.p.iii(C) |
| FHA concentration | For 20 or more units, FHA may suspend new case numbers above 10 percent FHA concentration; below 20 units, FHA-insured mortgages cannot exceed two. | No change | II.A.8.p.iii(D)(1) |
| Questionnaire | Lender submits completed, signed and dated HUD-9991. | No change | II.A.8.p.iii(D)(3) |
| Owner occupancy | At least 50 percent of total units. | No change | II.A.8.p.iii(D)(4) |
Source: HUD Handbook 4000.1, II.A.8.p.iii, Update 17 and Update 18 (issued August 12, 2026). Free assumability also appears in II.A.1.b.v.
A TOTAL Accept does not replace the project checks. Likewise, meeting the unit-count minimum does not settle the borrower review. Keep those questions separate when discussing a particular listing.
How FHA concentration works in small and large buildings
In brief: HUD uses different FHA concentration rules depending on project size. For projects with fewer than 20 units, FHA-insured mortgages cannot exceed two. For projects with 20 or more units, FHA may suspend new case numbers when FHA concentration exceeds 10 percent of total units, under II.A.8.p.iii(D)(1).
The wording matters: the larger-project rule describes when FHA may suspend new case numbers. It is not a promise that a case number will be available below that threshold. Ask the lender to check current concentration for the condominium project before relying on this route.
Owner occupancy and the HUD-9991 questionnaire
In brief: The lender must determine that owner occupancy reaches at least 50 percent of the project’s total units. The lender also submits a completed, signed and dated HUD-9991 questionnaire. These requirements appear in II.A.8.p.iii(D)(3) and (4), and both remain the same in Updates 17 and 18.
The questionnaire collects loan, project and unit information for FHA insurance endorsement. For a home search, the useful question is whether the lender has the information needed to complete its review. Ask what remains outstanding. Leave the owner-occupancy calculation and the decision about acceptable documentation to the lender.
What changes on November 10, 2026
The rules described above are the ones in force until November 10, 2026, when every lender must apply the Update 18 checklist change below (lenders may adopt it earlier).
In brief: November 10, 2026, is the mandatory implementation deadline for Update 18’s checklist change, with early implementation allowed. The upcoming change explicitly adds free assumability to single-unit property eligibility. FHA’s general property rules already require it, so the added reference does not create a brand-new obligation for these properties.
HUD issued Update 18 on August 12, 2026. Transmittal section 3 separates changes implementing Mortgagee Letters, which retain their previously announced effective dates, from all other changes, which may be implemented immediately and must be implemented no later than November 10, 2026.
Both handbook versions already require lenders, in II.A.1.b.v, to determine that legal restrictions on conveyance conform to 24 CFR § 203.41. Update 18 adds that reference directly to II.A.8.p.iii(C). It also updates lender case-number procedures in (D)(2), including a HUD FHA Self-Service Portal submission option. The checklist’s other listed standards do not change. Update 18 also removes a COVID-era exception for suspended student-loan payments by the same date; see how FHA counts a $0 student loan payment.
Where this shows up in a Savannah condo search
In brief: Ask about the project’s approval status before building an offer around FHA financing. Then ask the lender whether single-unit review is an option for that property and what information it needs. Use the answers to plan the home search and contract discussions, while keeping another property option available.
When I help with a condo search, I start with the project name and unit count, then ask about available owner-occupancy and FHA loan information. I bring those questions to the lender early. My role is the home search and contract; the lender evaluates the mortgage and the project documentation.
For related reading on the ARC Platform blog, see VA vs FHA vs conventional loans, Georgia first-time buyer programs and what a first home in Savannah really costs. Discuss your financing questions with a licensed mortgage professional.
This article explains general VA and FHA program rules for education only. It is not lending, legal, tax or financial advice and is not an offer or commitment to lend. Lenders may apply stricter requirements of their own. Talk to a licensed mortgage professional about your situation. Alex Rodino is a REALTOR® with Keller Williams Realty Coastal Area Partners, Georgia real estate license #443565. Equal Housing Opportunity.
Frequently asked questions
In brief: Single-unit approval depends on both the mortgage application and the condominium project. These answers summarize the key requirements above, including the upcoming checklist change. Use them to frame questions for your lender, not to decide on your own whether a particular unit will receive financing.
What is FHA single-unit approval?
FHA single-unit approval is a review of a unit in a condominium project that is not FHA approved. The lender must verify both the unit and the project against HUD’s requirements, along with the mortgage application. It is a possible route to an FHA-insured mortgage, not a promise of financing. Ask your lender whether it can review the specific property before treating it as a workable purchase option.
How many units must a condo building have for FHA single-unit approval?
The condominium project must have at least five units for FHA single-unit approval. HUD states the rule in terms of the project, so ask the lender to confirm the relevant project boundaries instead of counting only the doors in one building. The minimum count is one requirement among several. Completion, occupancy, project approval status and the other property requirements still need review under Handbook 4000.1, II.A.8.p.iii.
How many FHA loans can be in one condo building?
For projects with fewer than 20 units, FHA-insured mortgages cannot exceed two. For projects with 20 or more units, HUD says FHA may suspend new case numbers when FHA insurance concentration exceeds 10 percent of total units. These are project-level rules in II.A.8.p.iii(D)(1). Have the lender check the project and its FHA concentration; an existing FHA loan elsewhere in the development does not settle whether your proposed loan can proceed.
What owner-occupancy percentage does FHA require for a single-unit approval?
HUD requires owner occupancy of at least 50 percent of the condominium project’s total units for single-unit approval. That standard appears in II.A.8.p.iii(D)(4) in both handbook versions reviewed here. The lender must determine the percentage using HUD’s requirements and submit form HUD-9991. Ask for documented project information early, but leave the formal calculation to the lender. A listing description or informal estimate is not the lender’s completed review.
What changes for FHA single-unit approval on November 10, 2026?
Upcoming, by November 10, 2026, Update 18 explicitly adds free assumability to the single-unit property checklist. Lenders may implement the change immediately and must implement it by that date. FHA’s general property rule already requires compliance, so this is an explicit checklist reference to an existing obligation. The update also revises case-number procedures. The unit-count, owner-occupancy and FHA concentration standards discussed here are unchanged between Updates 17 and 18.
Does a single-unit approval approve the whole condo building?
No, single-unit approval does not approve the entire condominium project. HUD specifically says that issuing an FHA case number for single-unit processing is not Condominium Project Approval of either the unit or the project. The lender must complete the documents and verifications as loan-level requirements. Do not treat a case number as a finished approval, or assume another buyer can rely on your transaction to avoid their own lender’s review.
Looking at condos with an FHA loan?
In brief: I can help organize your condo search and the property questions to raise before an offer. Bring your lender into the discussion early so the home search and contract reflect what still needs review. Start with Savannah homes for sale, then narrow the options together.
Call 912-351-8935, text 912-210-8967 or contact Alex for help with the home search and contract.
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