FHA Condo Loans

I was recently approved for an FHA loan on a home. The mortgage broker told me that the down payment was going to be 3.5% min. I decided to expand my home search to condos (can buy in better location than a home in my price range) and asked my mortgage broker if the lending requirements differ. Per the broker, she told me that I would need a minimum 25% down payment to be approved for an FHA condo loan. Is this correct? The reason I ask is that I was close to making an offer on a place until she told me this. I wanted to find out if was in fact true, or if she was just trying to get me to steer clear of condos for some odd reason. The difference in down payment requirements (21.5%) seems rather high, and hardly believable. Can anyone offer insight on this? On a separate but related note, she also told me that the first-time homebuyer tax credit can't be applied to down/closing costs. Yet my real state agent says that it can be applied. I am also wondering if she is incorrect with this statement as well??? by pam4466 from Orange, California. Jan 13th 2011 Reply