FHA loans are insured by the Federal Housing Administration (FHA), which means that the government backs the loan if the borrower defaults. This makes FHA loans a good option for borrowers with less-than-perfect credit or who don't have a large down payment.
However, to qualify for an FHA loan, the borrower must meet certain critera to obtain FHA financing as well as the property.
What are the FHA property requirements?
The Federal Housing Administration (FHA) has a set of property requirements that must be met in order for a home to be eligible for financing with an FHA loan. These requirements are designed to ensure that the homes that are financed with FHA loans are in good condition and are safe for borrowers and their families.
Here are some of the key FHA property requirements:
- The home must be structurally sound. This means that the home must be free of major structural defects, such as cracks in the foundation or walls, or a roof that is in need of repair.
- The home must be free of health and safety hazards. This means that the home must be free of lead-based paint, asbestos, and other potential health and safety hazards.
- The home must meet all local building codes. This means that the home must be built in accordance with all applicable building codes, including codes for fire safety, electrical safety, and plumbing safety.
- The home must be in good condition. This means that the home must be free of major defects, such as peeling paint, damaged flooring, or a leaky roof.
If you are considering buying a home with an FHA loan, it is important to have the home inspected by a qualified home inspector to make sure that it meets all of the FHA property requirements.
Additional tips for borrowers who are considering an FHA loan
- Get pre-approved for a loan before you start shopping for a home. This will give you an idea of how much you can afford and will make the home buying process go more smoothly.
- Compare rates and terms from multiple lenders. FHA loans can vary in terms of cost, so it is important for your Mortgage Loan Originator to have the ability to shop around to get the best deal.
- Be prepared to pay a mortgage insurance premium (MIP). MIP is typically 1.75% of the loan amount and is paid monthly.
- Make sure the home you are buying meets FHA property requirements. Homes must be in good condition and meet FHA standards.
If you are considering an FHA loan, be sure to work with a qualified mortgage broker like Tried & True Home Loans who can help you understand your options and find the right loan for your needs.