Ready To Apply for an FHA Loan?
January 27, 2023
Believe it or not, knowing what type of home loan you need is an important step. Borrowers who want to buy a condo unit, for example, will find the FHA loan process to be a bit different from the one needed to buy a manufactured home, fixer-upper, or other properties.
Those who have some experience buying homes know that is some fairly Home Loans 101-type advice. What’s not so obvious? Knowing the differences between types of home loans and their uses. For example, you don’t apply for the same type of loan to buy a suburban house as you do a fixer-upper. What kind of FHA loan is right for your specific transaction?
FHA Condo Loans
Those who want to buy condo units should know those properties should typically be located in a condo project that is on (or can be added to) a list of FHA-approved condominium projects. That said, some borrowers do NOT know there may be certain exceptions. A condo unit in an “unapproved” project MAY be approved for an FHA mortgage if it can meet the FHA criteria for approval as an exception.
FHA Manufactured Home Loans
Are you looking at buying a manufactured home? FHA loan rules may require the home to be delivered straight from the manufacturer to the lot it will be situated upon and you will be required to have the home permanently installed on an approved foundation.
FHA Construction Loans
Borrowers who don’t want existing construction may consider building a house from the ground up with an FHA One-Time Close construction loan. If this is an option you are thinking of, be sure to research the need for extra funds--money you may need more time to save.
Why? In addition to the minimum 3.5% down payment, your closing costs, and other funds set aside for the loan, consider saving an emergency reserve or contingency reserve for unexpected costs during construction.
FHA Rehab Loans
And what about those in need of an FHA 203(k) Rehabilitation Mortgage? If you are buying a fixer-upper, consider whether to apply for additional loan funds through the FHA Energy Efficient Mortgage add-on. This gives you more loan funds specifically to be used for approved energy-saving improvements to the property.
Refinancing Inherited Homes
Are you trying to refinance an inherited home? If you apply for FHA refinancing on such a home, know that the status of the property makes a big difference.
FHA loans for inherited homes include a rule which states that if you rented out the property you won’t be eligible for an FHA Cash-Out Refinance loan until you have lived in the inherited home for 12 months or more. If you did NOT rent the home out to others in this way, you may not have a prior occupancy requirement to deal with.
Ask a loan officer about any of these issues if you have questions ahead of your home loan application. Remember that state law and lender standards may also apply where these loan rules are concerned; FHA requirements are not the only rules that may apply.
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FHA Loan Articles
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.
December 30, 2024When applying for an FHA loan, lenders will consider more than just your credit scores and history. They also look at other factors affecting your risk profile and the interest rate they offer you.
One factor is occupancy type. For FHA loans, this is straightforward because these loans require owner occupancy. Investment properties aren't eligible. While conventional loans may have different rates for primary residences, second homes, and investment properties, this isn't a concern with FHA loans.
