August 31, 2022
Are you ready to apply for an FHA mortgage? You’ll want to make sure you have done a few important preliminary steps before you submit an application. The most basic thing to start with is knowing what type of home loan you need.
If you plan to buy a condo unit your FHA loan will be a different variety than if you need to buy a manufactured home, for example.
That may sound like some of the most basic home loan advice out there, but what is not so basic is knowing that there are nuances for some of these loans you need to know.
A condo unit must typically be part of a project that is on or added to the approved list for FHA loans. But did you know there are certain exceptions and a condo unit MAY be approved for an FHA mortgage even if it is in a project not on the list?
And for manufactured homes, you should know that FHA loan rules may require the home to be delivered straight from the manufacturer to the lot it will be situated upon.
Are you ready to apply for an FHA loan? If you are building a house from the ground up with an FHA One-Time Close construction loan you will need to ensure that in addition to your down payment, your closing costs, and any funds set aside for inspections where needed, you should also plan on needing an emergency reserve or contingency reserve.
This is money you have set aside for the specific purpose of dealing with unexpected issues during the construction process.
Are you applying for an FHA 203(k) Rehabilitation Mortgage? If so, you’ll want to 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.
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.
If you are currently using the inherited home as a primary residence, qualifying for your FHA refinance will be easier than if you had been using the property as an investment ahead of the loan application. What does this mean?
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.
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.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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