Woman considers FHA condo loan in Las Vegas.

Why FHA Condo Loans Are Denied in Las Vegas, Nevada

Q: What does it mean for a condominium project to be 'FHA-approved'?

A lender's seasoning period is a mandatory waiting time after you purchase or refinance a property before you can access the full after-repair value (ARV) for a cash-out refinance. Most DSCR lenders require a seasoning period of 6 to 12 months. Refinancing before the seasoning period concludes typically means the lender will base the loan amount on your original purchase price plus rehab costs, which severely limits the amount of equity you can cash out. Waiting until after the period allows you to borrow against the full market value you created through your renovations.

Q: What are the most common reasons a condo project in Las Vegas fails to get FHA approval?

To justify a higher appraised value, you should provide the appraiser with a detailed and organized renovation packet. This packet removes guesswork and provides concrete evidence of the work performed. It should include: a cover letter summarizing the major upgrades, a detailed scope of work document itemizing all improvements, compelling before-and-after photos showing the property's transformation, copies of paid invoices and receipts for materials and labor, and copies of any official building permits that were issued for the work.

Q: How can I check if a condo is FHA-approved before making an offer?

No, LTV limits for cash-out refinances vary significantly among different DSCR lenders, as each has its own guidelines and risk tolerance. While purchase loans may reach 80% LTV, cash-out refinances are often capped at 70% or 75% LTV. The specific LTV offered to an investor is influenced by several factors, including: Credit Score (higher scores typically qualify for higher LTVs), DSCR Ratio (a stronger income-to-debt ratio may result in a better LTV offer), Property Type (a single-family home might receive a higher LTV than a multi-unit property), and Loan Amount (some lenders may offer different terms based on the size of the loan).

Q: What do the different approval statuses like 'Approved', 'Expired', or 'Rejected' mean?

Your property's monthly rental income is the foundation of a DSCR loan approval. The formula is: DSCR = Gross Rental Income / Total Monthly Housing Payment. A higher rent results in a higher DSCR. This proves to the lender that the property can comfortably support a larger loan payment, which in turn allows you to qualify for a larger loan amount and maximize your cash-out.

Q: What is a 'non-warrantable condo'?

Yes, it is often possible to pay for closing costs with the proceeds from your new loan, meaning you don't need to bring cash to closing. However, these costs are not added on top of your loan limit. Instead, the closing costs are subtracted from the total cash-out funds available to you after your existing mortgage is paid off. The total loan amount, including these costs, cannot exceed the lender's maximum LTV limit based on the property's appraised value.

Q: What are my financing options if the condo I want is not FHA-approved?

Investors can make several avoidable errors that reduce their available cash-out funds. The most common mistakes include: Poor Documentation (failing to provide an appraiser with a thorough renovation packet can lead to a conservative and lower valuation), Refinancing Too Soon (not waiting for the lender's seasoning period to expire is a costly mistake that forces the loan to be based on cost rather than value), Lacking a Tenant (attempting to refinance a vacant property is less favorable, as lenders prefer the security of a signed lease over estimated market rents), and Ignoring Lender Differences (accepting the first loan offer without comparing options can mean missing out on better LTV limits or shorter seasoning requirements from other lenders).

Q: Can a condo complex get its FHA approval status reinstated for a buyer under contract?

The ideal time to begin the refinance process is 30 to 45 days before your lender's seasoning period expires. This allows you to gather all necessary documentation, secure an appraisal, and complete underwriting so that you can close immediately once the seasoning requirement is met. Crucially, by this time, the property should also be 'stabilized,' which means you have a qualified tenant in place with a signed lease and have collected at least the first month's rent.

February 27, 2026

Specialized In Jumbo Loans, Investor Loans, DSCR Loans, Non-QM Financing, Commercial Mortgages, and Tax-Informed Lending Strategies

Published By

David Ghazaryan

Owner / Broker / Banker

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(702) 766-3744

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TL;DR

Securing an FHA loan for a condo in Las Vegas or Henderson requires approval for both the buyer and the condominium project itself.
Many condo complexes fail to get FHA approval due to specific issues like a high number of renters, excessive delinquent HOA dues, pending litigation, or insufficient insurance coverage.
You can verify a condo project's eligibility by searching for it on the official HUD FHA-Approved Condominiums database before making an offer.
If a condo is not FHA-approved (often called 'non-warrantable'), alternative financing options may include conventional loans or specialized Non-Qualified Mortgages (Non-QM), which often require larger down payments.

What is the FHA-Approved Condominium List for Las Vegas?

When you apply for a Federal Housing Administration (FHA) loan to buy a condominium, both you and the condo project must be approved. The FHA maintains a strict set of rules for condominium complexes to ensure they are financially stable, well-managed, and primarily residential. To simplify the process for lenders and buyers, the U.S. Department of Housing and Urban Development (HUD) maintains a database of all approved projects.

The FHA-approved condominium list is a searchable, public database that tells you if a specific condo complex in Las Vegas or anywhere else in the country is eligible for FHA financing. If a complex is on this list with an 'Approved' status, it means the FHA has already vetted the project's financials, legal documents, and insurance coverage. This pre-approval streamlines the lending process significantly.

However, if a project is listed as 'Expired', 'Rejected', or is not on the list at all, you cannot use a standard FHA loan to purchase a unit there. This is a common roadblock for buyers in competitive markets like Henderson, where many otherwise fantastic properties are located in non-approved complexes.

Why Would a Henderson Condo Project Not Be FHA-Approved?

The FHA's goal is to minimize risk to its mortgage insurance fund. It avoids insuring loans in projects that show signs of financial instability or operational issues. A denial is not a judgment on the quality of the individual condo units but rather a risk assessment of the entire complex and its Homeowners Association (HOA).

Many desirable complexes in Henderson and Las Vegas fail to secure FHA approval for reasons that have nothing to do with their pools or clubhouses. The issues are almost always related to financial, legal, or occupancy metrics that the average buyer would never think to investigate. Understanding these specific disqualifiers is the first step to avoiding a frustrating loan denial after you've already made an offer.

What Specific Issues Cause FHA Project Denials?

The FHA has a long checklist, and failing even one of these key requirements can result in a denial for the entire project. Here are the most common reasons a Nevada condo complex won't make the cut:

High Investor Concentration: The FHA requires at least 50% of the units in a project to be owner-occupied. If more than half the units are rentals, the FHA views the project as a riskier, transient community. For a 120-unit building in Summerlin, this means at least 60 units must be primary residences or second homes. (The data, information, or policy mentioned here may vary over time.)
Delinquent HOA Dues: If more than 15% of the unit owners are over 60 days late on their HOA dues, the project is ineligible. A high delinquency rate signals financial instability within the HOA, which could lead to deferred maintenance and special assessments. (The data, information, or policy mentioned here may vary over time.)
Pending Litigation: The FHA will not approve projects with significant pending lawsuits, particularly those involving safety, structural integrity, or the HOA's financial solvency. A lawsuit over a slip-and-fall might be acceptable, but litigation against the developer for construction defects is an automatic denial.
Single Investor Ownership Limits: To prevent one entity from having too much control, the FHA prohibits approval if a single investor or entity owns more than 10% of the total units. In a 50-unit complex, one person or company cannot own more than five units. (The data, information, or policy mentioned here may vary over time.)
Insufficient Insurance Coverage: The HOA must carry adequate insurance, including hazard, liability, and fidelity bond coverage. Fidelity bond insurance protects the HOA from fraud or theft by board members or management, and the FHA has strict requirements for the coverage amount based on the HOA's funds.
Commercial Space Limitations: If the building contains commercial or non-residential space (like retail shops on the ground floor), that space cannot exceed 35% of the total square footage of the project. (The data, information, or policy mentioned here may vary over time.)

How Do I Find Out if a Condo is Approved Before Making an Offer?

Checking a condo's FHA status should be one of the first things you do before getting emotionally invested in a property. A proactive approach can save you time, money on an appraisal, and major disappointment. Here’s how to do it:

Search the HUD Database: Go directly to the HUD FHA-Approved Condominiums search page. You can search by state, county, city, or the specific name of the complex.
Enter the Details: Select 'Nevada' and type in 'Las Vegas' or 'Henderson' in the city field. You can also add the zip code or name if you know it.
Interpret the Status:
- Approved: You're good to go. The project is eligible for FHA financing.
- Expired: The project was once approved, but the HOA let the approval lapse. It is currently not eligible.
- Rejected/Withdrawn: The project applied but was denied, or the HOA pulled its application. It is not eligible.
- Not Listed: If you can't find the complex at all, it has never been FHA-approved and is not eligible.

Pro Tip: Always work with a real estate agent and a mortgage lender who are experienced with condo financing in your area. They often have firsthand knowledge of which buildings are approved and can verify the status for you quickly.

What Are My Loan Options if the Condo I Want is Not FHA-Approved?

Discovering that your dream condo in Las Vegas is in a non-FHA-approved building doesn't have to be the end of your homeownership journey. A condo that doesn't meet FHA (or conventional) guidelines is often called a 'non-warrantable condo'. While mainstream lenders may turn you away, you still have excellent financing options available.

Is a Conventional Loan Better for Buying a Condo in Las Vegas?

A conventional loan, which follows guidelines set by Fannie Mae and Freddie Mac, is a great alternative. These loans often have slightly more flexible requirements for condo projects compared to the FHA. For example, Fannie Mae may allow up to 15% of unit owners to be delinquent on HOA dues (compared to the FHA's 15% over 60 days strict rule) and has different calculations for investor concentration.

With a large down payment (typically 20-25% or more), you may qualify for a 'Limited Review' on a conventional loan. This is a streamlined process where the lender requires less documentation from the HOA, increasing the chances of approval for a project that might not meet the standards of a 'Full Review'. A conventional loan is often a superior choice for condo buyers, provided you meet the credit and down payment requirements. (The data, information, or policy mentioned here may vary over time.)

Are There Special Mortgages for Non-Warrantable Condos?

Yes. When both FHA and conventional loans are off the table, you can turn to Non-Qualified Mortgages (Non-QM). These are portfolio loans offered by specialized lenders who don't sell their loans to Fannie Mae or Freddie Mac. Because they keep the loans on their own books, they can create their own rules for condo approvals.

Residential condominium building in Henderson

A Non-QM lender will still perform due diligence on the condo project, but their guidelines are designed for the real world. They understand that a great, financially sound building in Henderson might have a high investor ratio. To offset the perceived risk, Non-QM loans for non-warrantable condos typically require:

A larger down payment, often starting at 20% or 25%.
A slightly higher interest rate compared to a conventional loan.
Verification of the HOA's financial health, though with more flexible standards.

(The data, information, or policy mentioned here may vary over time.)

Can a Henderson Complex Get Its FHA Approval Reinstated?

Yes, an HOA board can pursue FHA approval or reinstatement, but it's a long and arduous process. It is not a realistic solution for a buyer who is currently under contract. The HOA must hire a consultant or work with a lender to compile a massive package of documents, including budgets, reserve studies, insurance policies, bylaws, and owner occupancy certifications.

This package is submitted to HUD for review, a process that can easily take 3 to 6 months with no guarantee of success. If the project's core issues (like too many renters or delinquent dues) aren't fixed, the application will be denied again. Therefore, as a buyer, you should always plan your financing based on the project's current status, not its future potential. Buying a condo in Las Vegas or Henderson has unique hurdles. If you've found the perfect place but are worried about financing, it's crucial to partner with a mortgage expert who understands non-warrantable condos and has access to lenders beyond the big banks. A specialist can quickly identify the right loan program for your specific property, saving you from a last-minute denial.

If you've found the perfect condo in Las Vegas or Henderson but are facing financing hurdles, our experts specialize in navigating these unique challenges. We can help you find the right loan program for your specific property. Take the next step with confidence and Apply now to partner with a mortgage specialist.

Author Bio

David Ghazaryan is the expert mortgage strategist and founder behind iQRATE Mortgages. With a mission to fund home loans that traditional banks won't touch, David specializes in helping clients with unique financial situations, including those recovering from foreclosure or bankruptcy. He expertly crafts smart, strategic, and stress-free mortgages by leveraging a vast network of over 100 lenders to secure competitive rates for investors and homebuyers alike. Praised for exceptional customer service, David has helped hundreds of families with a 97% satisfaction rate, guiding them to the mortgage they deserve.