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
August 19, 2023FHA refinance loans allow homeowners with existing FHA loans to refinance their mortgages. These loans are designed to help borrowers take advantage of lower interest rates, reduce their monthly mortgage payments, or access equity in their homes for various purposes.
August 14, 2023FHA loans typically require a minimum down payment of 3.5% of the purchase price of the home with the right credit score. This means that if you're buying a house for $240,000, you would need to make a down payment of at least $8,400.
August 10, 2023FHA loans have specific rules and requirements for borrowers who have filed for bankruptcy. The guidelines can change over time, so it's essential to consult with a qualified lender or FHA-approved counselor for the most up-to-date information.
August 3, 2023FHA loans are primarily designed to help individuals and families purchase homes for use as their primary residences. Rules for these loans generally discourage their use for investment properties or rentals. However, there are exceptions that come with strict rules.
July 29, 2023One crucial aspect of FHA loans that borrowers need to understand thoroughly is debt ratios. In this article, we look at how they can impact your ability to secure financing for your dream home. Debt ratios help lenders understand a borrower's creditworthiness and any risks associated with the loan.
