Mortgages insured by the Federal Housing Administration help many people to buy a home who couldn’t do so otherwise. That’s because lenders are often willing to loan to people with less of a down payment because the loan is insured by a federal agency. However, the FHA has just made it more difficult to obtain an insured condo loan.

Generally, the FHA can insure a loan only if the condo project has been approved by the Department of Housing and Urban Development, or HUD.

In the past, if a lender wanted to issue a loan for a condo project that wasn’t HUD-approved, it could use a process called “spot approval.” Essentially, the lender would analyze the project using guidelines provided by HUD, and if the project met the HUD criteria, the lender could okay the loan.

As of February 1, 2010, though, HUD has done away with spot approvals. That means that loans can’t qualify for FHA insurance unless HUD formally approves the project, which can take quite a bit longer than a simple spot approval.

In addition, the FHA now says that it will no longer insure condo loans if 30% or more of the units in the project already have mortgages that are FHA-insured. This means that many condos will now be ineligible for FHA-backed loans until some of the owners move or pay off their mortgages.