Federal Housing Administration (FHA) Mortgage

If you require a smaller down payment or are using a down payment from other sources such as a gift, this may be the perfect mortgage for you. This is a more flexible mortgage loan option for first-time home buyers or those with past credit issues.

For those just starting out, an FHA loan may be a good option to help you fulfill your home dreams. While these loans do not come directly from the FHA, the FHA guarantees the loan which reduces the lending risk and may give you more borrowing power. You also may have better rates due to FHA home loan insurance.

It's important to note that FHA properties must meet certain requirements (below) that both sellers and buyers should be aware of in advance.

 Repair Requirements

  • Anything that would jeopardize the health and safety of the occupants 
  • Protect the security of the property
  • Correct physical deficiencies or conditions affecting structural integrity of the property

Typical Conditions that Would Require Further Inspection or Testing 

  • Inadequate access/egress from bedrooms to exterior of home
  • Leaking or worn out roofs (if there are three or more layers of shingles on leaking or worn out roof, all shingles must be removed before re-roofing)
  • Evidence of structural problems (such as foundation damage caused by excessive settlement)
  • Defective paint surfaces in homes constructed pre-1978
  • Defective exterior paint surfaces in homes constructed post-1978
  • Inoperative/inadequate plumbing, heating or electrical systems
  • Structural failure in framing members
  • Drainage problems

 Ineligible Property Issues 

  • Excess land 
  • Not a residential property
  • Properties with hazardous environmental contaminants
  • Noxious odors
  • Offensive sights
  • Excessive noises
  • Soil contamination
  • Underground storage tanks
  • Manufactured homes 

 Other Requirements 

  • Utilities must be turned on and appraiser must check for proper working order. 
  • Wells must be located a minimum of 100 feet from the septic tank’s drain field and a minimum of 10 feet from any property line. If state or local laws require greater distances, those distances must be met. 

Your mortgage lender is the best resource when it comes to FHA loans.

All mortgage loans subject to credit approval.

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