Loans made through the Federal Housing Administration (FHA) program were subject to political wrangling, particularly as they apply to properties such as apartment buildings  that have been converted into condos. In 2018, the National Association of Realtors (NAR) lobbied Congress to put pressure on the Secretary of Housing and Urban Development regarding FHA lending on condos. The NAR’s goal was to make FHA condo loans less restrictive at a time when home affordability was becoming difficult.

Only a few improvements have been seen in relation to the FHA condo lending process. With regard to condo units, the FHA approval list rule still stands, which means financing is only available for units in condo buildings that are on the FHA list. That would include:

Small Condo Buildings 

Let’s say you’re the owner of a Boston historic building in Beacon Hill and you wish to convert it into Beacon Hill condos. If the structure is between two and four condos, unit owners would have to draft and execute a memorandum of understanding with the FHA for the purpose of stating each unit owner will take care of his or her own maintenance and repairs. Absent this document, which needs to be recorded at the county level, the FHA will not extend a condo certification.

Mixed Zoning Condo Projects

Mixed-use zoning is a trend that developers of condos in downtown Boston have embraced in recent years. The prospect of living in a Boston high rise condo tower where some floors, usually at the ground level, are filled with restaurants and shops can be very enticing, but FHA rules limit the amount of commercial space to 50 percent.

Ownership by Investors

It’s widely understood that FHA loans are for owner-occupied properties, but there’s an additional restriction that extends to other owners in a Beacon Hill condo building. If 50 percent of units are owned by investors for rental purposes, no further FHA lending can take place in that Beacon Hill building.

Condo Insurance Requirements

This restriction can be a bit tricky because it depends on the will of the Boston condo association to obtain certain coverage. The master policy must provide 100 percent coverage for the building structure, and this can be a challenge because of rising premiums in a market such as downtown/midtown condos, where condo appreciation has been very strong in recent years. For Boston Midtown condo towers with more than 20 units, FHA rules call for a fidelity bond to cover board directors and employees hired by the association to handle administrative duties. This bond must be estimated by taking into account the assessments of all units plus the association’s cash reserves.

FHA loans are a great option for many home buyers, but if you’re looking to buy a Boston condo for sale, make sure to do your research on the most current FHA regulations regarding condo loans. It’s also a shrewd move to work with realtors who have experience with the various financing options for Boston Midtown condos.

Please us help you find your dream condo in Boston Midtown, Beacon Hill Charles River Park or any Boston downtown area. My team can work alongside you through the home-buying process. Call one of our friendly agents today at 617-595-3712.

Author Profile

John Ford
John Ford

Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs

In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.


For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.


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John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.

John Ford
Ford Realty Inc
137 Charles Street
Boston, Ma 02114



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