How Livable Is Your Dream Home?
October 30, 2024
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.
FHA minimum standards for homes secured with FHA mortgages include a review of the property's important features, including the electrical system, plumbing, roof, and foundation.
Mechanical Systems In The Home
FHA loan rules in HUD 4000.1 require that a home's heating, cooling, plumbing, and electrical systems be in working order and safe to use. As we’ll explore below, those systems must also be sufficient to serve the property they are installed in.
The FHA appraisal process may flag issues such as visibly faulty wiring, a leaking water heater, or an inefficient furnace. In cases of deficiencies, your seller may be required to repair or replace things in the home that do not meet FHA minimum standards.
Roof Issues
The roof is one of the most critical components of the home. HUD 4000.1 has noted in the past that the roof should have a remaining physical life of at least two years. If the appraiser notes issues with the roof, these may be required to be corrected before closing time.
Lead Paint
One important aspect of FHA minimum standards for all homes purchased with single-family FHA loans? Lead paint. While not always a health hazard, chipping or peeling paint can indicate deferred maintenance and moisture problems.
Peeling paint is considered a health and safety issue, and corrections may be required as a condition of loan approval. This is typically true at both the state and federal regulatory levels.
FHA Loan Requirements
FHA loan regulations include language such as "The water supply system must be adequate for the needs of the dwelling."
All home systems must meet this guideline. The home’s systems should be powerful enough to serve the entire property, not just a few rooms. That goes for water, septic, electrical, HVAC, and related systems.
FHA Loan Articles
May 29, 2025An FHA cash-out refinance allows homeowners to borrow against their home equity. It replaces their current mortgage with a new, larger one; the borrower then receives the difference between the two loan amounts in cash. But these refinances have unique requirements borrowers need to consider on their way to filling out the application. Learn more about FHA cash out refi loans with our list of frequently asked questions.
May 21, 2025Buying a home is a major financial milestone. Paying off a mortgage in full is another one. Some borrowers are content to make the exact payment required and ride their mortgage out for the full term or until they refinance it. Others want to pay more and pay off their mortgage as early as possible. Several strategies can speed up the process for those who find the benefits of early payoff more attractive.
May 20, 2025If you are buying a home with an FHA mortgage, you’ll want to learn how the Federal Housing Administration (FHA) addresses termite and other wood-destroying pest issues that might be associated with the new property. How much do you know about termites and other wood-destroying pests? You could save time and money by knowing key details ahead of time.
May 19, 2025When you get ready to commit to buying your dream home, the FHA appraisal is necessary to make certain the house you want is suitable for the loan and to know its actual fair market value. Is it in good repair? Does it have termites or other pests? Is it near a high-noise environment like an airport or bus terminal? There are many issues to consider, and the FHA appraisal process is designed to address them, as we'll explore.
May 14, 2025When you buy a home with an FHA mortgage, you must pay for both mortgage insurance and insurance to protect your property while paying on the loan. There are important nuances to these insurance policies to know before you start. What's the difference between insurance against water damage and flood insurance? That's just one example of the "hidden" expenses of buying your new home to budget for.
