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
January 27, 2025When buying or selling a home, two critical processes are often confused: the appraisal and the inspection. Though both involve a thorough examination of the property, they serve distinct purposes and provide different types of information vital to a successful FHA loan transaction.
January 22, 2025Consider this scenario: you've been in your home for five years or more and you've likely built up a significant amount of equity, and now you might be wondering how to put that equity to work for you. Whether you're dreaming of a major renovation, need to consolidate debt, or want to help a child with college tuition, you have options. Two choices are an FHA cash-out refinance and a home equity line of credit (HELOC).
January 20, 2025The FHA Streamline Refinance offers a refinance option for those who don't want to cash in on their property's equity but instead want a lower payment or interest rate or who need to get out of an adjustable-rate mortgage. This streamlined program, designed specifically for those already in an FHA-insured mortgage, simplifies the refinancing process with fewer requirements and faster approval times depending on the transaction.
January 16, 2025Want to buy a home and thinking about getting an FHA loan? FHA loans are a great way to make homeownership happen, especially if you're a first-time buyer or don't have perfect credit. But you might wonder, "Can I get more than one FHA loan?"
The short answer is, it's tricky. The FHA itself doesn't say no automatically to having more than one loan. But there's a caveat. FHA loans are about helping you buy a place to live in – your main home base. Because of this, and a few other things, getting multiple FHA loans isn't easy.
January 15, 2025Buying a condo with an FHA loan is an option some don’t consider initially, but it’s worth adding to your list of potential property types. FHA loans for condo units traditionally require condo projects to be on or added to the FHA-approved list. Still, changes in policy over the years allow borrowers to apply for FHA loans on condo units in projects not on the list on a case-by-case basis.
