Best Loan Options for Buying a Condo in 2025

Buying a condo should feel like a smart, exciting step, not an overwhelming puzzle. But if you've ever tried comparing condo mortgage options, you’ve probably run into lender jargon, unclear requirements, and some serious information gaps. We get it. Condo loans aren’t one-size-fits-all, and not knowing the full picture could cost you thousands.

Whether you’re buying your first home, relocating, or adding an investment property to your portfolio, this guide will help you navigate the best financing options for condos without the stress. Let’s sort through the confusion and get you the clarity (and loan) you deserve.

Key Takeaways:

• Understand how condo loans differ from standard mortgages.
• Compare FHA, Conventional, Jumbo, and Portfolio loan options.
• Learn how to avoid common pitfalls with condo financing.

What Makes Condo Loans Different?

Condos come with unique complexities. Unlike single-family homes, condos involve shared spaces, HOA fees, and stricter underwriting. Here’s what you need to know:

• Lender Risk Assessment: Lenders scrutinize not just your finances, but the condo building’s health, occupancy rates, reserve funds, litigation, etc.
• Loan Approval: Some loans won’t apply if the condo complex doesn’t meet specific criteria (e.g., too many non-owner-occupied units).
• Higher HOA Fees: This fee can affect your debt-to-income (DTI) ratio and loan approval.

Pro Tip: Ask for the condo’s questionnaire early. It can make or break your mortgage approval.

Comparing the Top Condo Loan Options

1. Conventional Loans

Most common for qualified buyers.

• Down Payment: As low as 3% with qualifying income & credit
• Ideal For: Buyers with solid credit (typically 620+)
• Condo Approval: Must be on the Fannie Mae/Freddie Mac approved list
• Bonus: No upfront mortgage insurance, cancellable PMI.

2. FHA Loans

Flexible option, especially for first-time buyers.

• Down Payment: 3.5%
• Credit Score: Minimum 580
• Condo Eligibility: Must be FHA-approved (searchable list online)
• Heads Up: Includes upfront and monthly mortgage insurance.

3. Jumbo Loans

For high-cost areas where home prices exceed conforming limits.

• Down Payment: Typically 10–20%
• Credit Score: Often 700+
• Ideal For: Luxury condo buyers
• Important: Strict underwriting and large reserve requirements.

4. Portfolio Loans / Non-QM Options

When your situation doesn’t fit the box.

• Flexibility: Tailored to self-employed, investors, or unique credit scenarios
• Down Payment: Varies by lender
• Pros: No traditional income verification in some cases
• Caution: Rates and fees may be higher.

How to Qualify for a Condo Mortgage?

See what lenders look at more than your income:

• Credit Score: Aim for 620+ for Conventional, 580+ for FHA
• DTI Ratio: Try to stay under 43%, including HOA dues
• Reserves: Lenders often want to see 2–6 months of expenses saved
• Condo Project Review: Full or limited review, depending on your loan type.

Action Step: Gather recent pay stubs, tax returns, bank statements, and the HOA’s condo documents. The cleaner your file, the smoother your approval.

Best Practices When Buying a Condo

• Compare Rates from at least three lenders (shop smart, not fast)
• Review Condo Docs: Check for pending litigation, delinquent HOA dues, or special assessments
• Understand Closing Costs: Budget for upfront fees and insurance
• Negotiate Smart: Don’t waive inspections or skip HOA review

Helpful Tool: Consider working with Be My Neighbor to connect with trusted local professionals, or explore realpha—a commission-free home buying platform that empowers you to shop without pressure.

FAQs

What credit score do I need to buy a condo?‍

It depends on your loan type. FHA loans start at 580, while conventional loans typically require 620 or higher.

Are condo loans harder to get approved for?‍

Yes, due to stricter condo project reviews and additional underwriting layers.

Can I get a condo loan with less than 20% down?‍

Absolutely. FHA and Conventional options both allow down payments as low as 3%.

Why do lenders care about the condo association?‍

The association’s financial health impacts your investment risk. Lenders want to ensure the building is well-maintained and financially stable.

Can I use a commission-free platform to buy a condo?‍

Yes—platforms like realpha let you browse, connect, and close without commission fees, which can save thousands.

Final Thoughts: Empower Your Condo Buying Journey

Condo financing doesn't have to be confusing or costly. Whether you’re looking for a flexible low-down-payment loan or a custom fit for a unique situation, understanding your options is the first step toward smart homeownership.

For a smoother experience, consider platforms that simplify your home search and financing journey. Be My Neighbor connects you to local expertise, while realpha offers commission-free purchasing to help you keep more of your money where it belongs—in your future home.

Required Compliance Disclosures:

This article is for educational purposes only and does not constitute financial advice. All loan products are subject to credit and underwriting approval. Terms and conditions may apply and are subject to change without notice. Interest rates and APRs are illustrative and may not reflect current market conditions.

NMLS #1743790. Be My Neighbor is a licensed mortgage company. realpha is a commission-free home buying platform and does not originate or broker mortgages. Please consult with a licensed mortgage professional for personalized advice.