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
November 22, 2023In 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?
November 4, 2023In 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.
October 14, 2023FHA 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.
September 25, 2023Mortgage rates are hitting prospective homeowners hard this year and are approaching 8%, a rate that didn't seem very likely last winter. With so many people priced out of the market by the combination of high rates and a dwindling supply of homes.
September 19, 2023The FHA Handbook serves as a crucial resource for mortgage lenders, appraisers, underwriters, and other professionals involved in the origination and servicing of FHA-insured home loans. It outlines the policies and requirements for FHA-insured mortgages.
