When buying a condo using a conventional loan, your lender will need to submit the condo for review.

This article takes an in-depth look at Fannie Mae approved condos, what they are, how to find them, and how to get a home loan on one.

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What are Fannie Mae Approved Condos?

Fannie Mae and Freddie Mac are Government Sponsored companies that purchase mortgage loans from lenders. If you have a conventional loan, the chances are that Freddie Mac or Fannie Mae owns it. For a condo to be purchased using a conventional mortgage, the lender will need to submit the condo project for review.

Fannie Mae Ineligible Condos

  • Hotel and motel projects
  • Investment Projects with documents on file with SEC
  • Mandatory Fee’s for access to amenities
  • HOA has been or is in litigation
  • Manufactured housing

See all Fannie Mae Approved Condo requirements on the Fannie Mae website.

Condo Ownership Guidelines:

  • 21+ units – No more than 10% can be owned by one person or company
  • 5 – 20 units – two units
  • 2 to 4 units – one unit


Getting a Mortgage on a Condominium

Most lenders can help you get approved for a condo with a conventional loan. Typically lenders will require a credit score of at least 620-640 to qualify. Down payments can range between 5% – 20% depending on the circumstances and lender.

Besides the fact that a condo must be submitted to Fannie Mae for approval, the process of buying a condo is very similar to buying a single-family home.

Borrower Requirements:

  • Employed by the same company, or in the same line of work for the past 2 years
  • 2-3 months of reserves available
  • 620-640 minimum credit score
  • Provide W2’s, pay stubs, tax returns
  • Front-end DTI (debt to income) ratio of less than 32%.
  • 41%  maximum back-end DTI.

Buy Fannie Mae Approved Condos with 3% Down

Most conventional loans will require between 5% – 20% down. Fannie Mae and Freddie Mac created loan programs that require 3% down to compete with FHA loans.

Conventional 97 Loans

The conventional 97 loan program requires just a 3% down payment for borrowers with a 680 credit score. The Conventional 97 loan also allows down payments to be a gift from a relative or friend.

Home Possible and HomeReady Loans

The Home Possible and HomeReady loan programs from Fannie Mae and Freddie Mac were created exclusively for low-income first-time homebuyers. They require a 620 credit score and 3% down. To be eligible you must meet the income limit requirements, income cannot exceed 100% of the area median income.

Project Eligibility Review Service (PERS)

Lenders can contact conduct PERS to submit projects to be reviewed by Fannie Mae for approval. There are two types of condo reviews, automated and manual condo project manager (CPM) reviews.

Eligible Fannie Mae condo projects:

  • Detached unit in an already established condominium project
  • Attached unit in an already established condominium project


Buying a condo with poor credit, or a low down payment

If you don’t have at least a 620 credit score or have the down payment that is needed for Fannie Mae condos. You can look into FHA approved condos, which can be purchased with an FHA mortgage.

FHA loans are backed by the Government, which allows the lender to loosen their buyer requirements. You may qualify for FHA with a credit score of just 580, with a 3.5% down payment. You can search the FHA approved condo list here.

Condos for Veterans

If you’re a Veteran, you can buy a condo using a VA loan. Just like any other mortgage, it must be a condo approved by the VA. VA loans are the cheapest type of mortgage program around.

This is because they do not have mortgage insurance (MIP) and are 100% financed. You will not need a down payment with a VA mortgage. You can read more about using a VA loan to purchase VA approved condos here.