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FHA loans are one of the best options for young, first-time home buyers who have not had as much time to save for a large down payment or establish a high credit score.

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Ready To Apply for an FHA Loan?

Ready To Apply for an FHA Loan?
Before you get ready to commit to a home loan application, it’s good to review your circumstances and ask a few basic questions about your loan, your plans, and the home itself.

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

When not to Consider Refinancing a Home

There are plenty of reasons to delay plans to refinance a home. One reason has made big headlines. When borrowers face higher interest rates than originally approved for, that is a good reason to wait to refinance.

How FHA Construction Loan Draw Disbursements Work

When you are approved for an FHA One-Time Close Construction loan, you get a single loan that pays for both the costs to build the house, and serves as the mortgage. One application, one approval process, and one closing date.

Mortgage Rate Predictions for 2024

In the last days of November 2023, mortgage loan rates flirted with the 8% range but have since backed away, showing small but continued improvement. What does this mean for house hunters considering their options to become homeowners soon?

Is It Cheaper to Buy a Home With an FHA Loan or to Rent?

In May 2023, USA Today published some facts and figures about the state of the housing market in America. If you are weighing your options for an FHA mortgage and trying to decide if it’s cheaper to buy or rent, your zip code may have a lot to do with the answers you get.

Why Do FHA Loans Have Borrowing Limits?

FHA loan limits serve as a crucial mechanism to balance financial sustainability, regional variations in housing costs, and the agency's mission to promote homeownership, particularly for those with limited financial resources.

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