Quiz: Selling the Home Purchased with an FHA Mortgage
March 25, 2025
Is there a mandatory waiting period imposed by the FHA before you can sell a home purchased with an FHA loan?
No, the FHA imposes no mandatory waiting period before you can sell your FHA-financed home.
Does the FHA restrict the pool of potential buyers when selling a home financed with an FHA loan?
No, the FHA does not restrict the pool of potential buyers. In fact, FHA loans often attract a wider range of buyers due to lower down payment requirements and flexible credit criteria.
What is the key difference between an FHA appraisal and a home inspection?
An FHA appraisal focuses on the home's condition and safety to ensure it meets the FHA's minimum property standards. A home inspection is a more in-depth look at the property. Never trust the appraisal alone.
If an FHA appraisal reveals necessary repairs, who is typically responsible for addressing them?
The seller may be asked to address necessary repairs revealed by an FHA appraisal, though this is subject to negotiation with the buyer.
What is the first use of the proceeds from selling an FHA-financed home?
The proceeds from the sale are first used to pay off the remaining balance of the existing FHA mortgage.
Is the Mortgage Insurance Premium (MIP) recoverable when selling an FHA-financed home?
No, the MIP is not refundble unless you refinance an FHA loan within three years of purchase.
Are FHA loans assumable, and if so, what does this mean?
Yes, FHA loans are assumable, meaning a qualified buyer can take the existing loan with the approval of the lender. However, it is not a common practice.
What factors can impact the sale price and time it takes to sell an FHA-financed home?
Market conditions, interest rates, housing inventory, and local market trends can all impact the sale price and the time it takes to sell.
What potential tax benefit might sellers of a primary residence, including those with FHA loans, be eligible for?
Sellers may be able to deduct a portion of their capital gains from the sale of a residence. Check with a tax professional to learn current tax season rules.
What is the primary role of the FHA in the context of home sales?
The FHA's primary role is to facilitate homeownership by providing loan insurance, not to restrict the resale of properties.
What is a good way to prepare a home for sale that was purchased with an FHA loan?
Ensure the home is in good condition and meets FHA minimum property standards, addressing any potential issues before listing.
Why might a buyer be interested in a home that qualifies for an FHA loan?
Buyers are often attracted to FHA loans because of the lower down payment requirements and more flexible credit criteria.
What type of professional can be helpful when selling a home purchased with an FHA loan?
A real estate professional experienced in FHA transactions can be beneficial. What happens if the FHA appraisal is lower than the agreed-upon sale price? Negotiations will need to happen; the buyer may need to bring more cash to closing, the seller might need to lower the sales price, or the deal could fall through.
Does owning an FHA loan prevent you from refinancing into a conventional loan?
No, owning an FHA loan does not prevent you from refinancing into a conventional loan, and doing so will eliminate the MIP.
FHA Loan Articles
November 12, 2024Escrow is an important feature of most typical FHA loans. An escrow account is a third-party account where borrowers deposit funds designated for property taxes and other uses. Requirements to use escrow accounts typically stems from a need to protect all parties involved in the transaction
November 2, 2024When it’s time to consider buying a home, the Federal Housing Administration (FHA) offers two popular options. One is the traditional FHA purchase loan many use to buy a house in the suburbs. But not everyone wants to buy an existing property. Some want more control over the design and configuration of the home.
The other FHA construction loan option, the one-time close mortgage, comes in here. This option is for those who want to approve floor plans, have a say in the types of materials used to build the home and choose its features.
October 31, 2024When buying a home for the first time, it helps to know how long the process can take. How do you know if your appraisal report is delayed if you don’t know how long the FHA allows for the process to be completed? How long does it take to get from the final offer to closing day? A “typical” FHA loan process may take up to 45 days from start to finish. Several factors can influence this timeline.
October 30, 2024Just because an FHA loan is designed to be more lenient with FICO scores and require a lower down payment doesn’t mean the house you buy with that loan is less than ideal. Did you know that FHA loans have minimum property standards to ensure the home is safe and livable? Those standards require the home to have an “economic life” for the entire term of the loan so you can freely sell the property later on if you choose to do so.
October 29, 2024Buying a home with an FHA mortgage is a major life decision, and preparation is essential before you start house hunting or consider making an offer on a property.
How to get started? In the early stages, establishing your budget and how much work you need to do on your credit is key. But once you have gotten past the initial phase of that planning you’ll want to consider the house itself and what you want from it.
