Markdown_files/FHA handbook/page_831.md

## II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT

### C. Condominium Project Approval

#### 2. Project Eligibility

- A reserve study must be 36 months old or less and have been prepared by an independent third party that has demonstrated knowledge of and experience in completing reserve studies. The reserve study must include analysis of the Non-Gut Rehab.
- All Non-Gut Rehab work/repairs must be completed.

##### (3) Required Documentation

The following documents must be submitted:
- Form HUD-9992;
- Reserve study; and
- Evidence that all rehabilitation work/repairs have been completed.

### e. Two- to Four-Unit Condominium Project (10/15/2019)

#### i. Definition

A Two- to Four-Unit Condominium Project refers to a Condominium Project that comprises of at least two, but no more than four, one-family dwelling Units that are each separately owned with separate legal descriptions.

#### ii. Standard

All general FHA Condominium Project Approval requirements are applicable except:

- If state law does not require the creation of an annual budget or annual financial statements, a signed and recorded memorandum of understanding may be provided in lieu of the financial documents. The memorandum of understanding must define the individual Unit owner’s responsibilities for maintenance/repair/replacement of common areas including sidewalks, driveways, and common walls (includes side by side or vertical type Units) and must provide for a procedure for splitting any shared maintenance costs;
- The project must have an Owner Occupancy Percentage of 75 percent owner-occupied; and
- No Units in Arrears.

#### iii. Required Documentation

The following documents must be submitted:
- Documentation of the verification of compliance with the Two-to Four Unit Condominium Project requirements;
- Annual budget, financial statements or memorandum of understanding if applicable; and
- Documented evidence that each Unit is separately owned with a separate legal description.

**Handbook 4000.1**  
**809**  
**Last Revised: 01/10/2025**