I won a HUD bid for a "203k eligible" condo - no FHA loan??!

[Craig Carter]

The condo was advertised by HUD as IN (insured) and as "203k eligible".

I won the bid, and now I have trouble finding a reliable lender who would originate an FHA loan.

Every mortgage broker I spoke with so far told me that I cannot get an FHA loan because the condo is located in an HOA who is not FHA approved.

However, I called the HUD directly and they emailed me info where it is explained exactly how one could do a loan in a condominium project that is not FHA approved.

Here is a straight quote from their email"

"To be eligible for FHA insurance a condominium project must meet all condominium requirements and be approved by FHA or an unconditionally approved Direct Endorsement lender, as outlined in Mortgagee Letter (ML) 11-22, ML 12-18, ML 15-27 and ML 16-15.

FHA case numbers cannot be requested unless the project is approved. Expired, withdrawn or projects exceeding the FHA concentration percentage will not have case numbers assigned.

Exceptions to this requirement are for FHA-to-FHA streamline refinance transactions, HUD Real Estate Owned (REO) transactions, and those projects meeting the site condominium definition and requirements."

I feel like the condo I bid for does qualify as a "HUD Real Estate Owned (REO) transaction".

What do you think? 

This is my first ever real estate transaction, and although I've done a lot of reading, I feel completely unprepared.

Any advise would be greatly appreciated.

[Russell Brazil]

You will need to use a lender without internal overlays. @Upen Patel might be able to help.