April 5, 2023
There are many different types of real estate available to purchase or refinance with an FHA single family home loan.
Did you know that FHA loans are not limited to traditional suburban-type housing? Your options are as diverse as the kinds of real estate you might consider purchasing.
For example, while an existing construction suburban home is definitely an option with FHA loans, you can also consider a new construction home.
The difference between new and existing construction can be technical; new construction properties have generally been completed for a year or less and have never had an owner.
So while you may not be interested in a “build-to-suit” new construction loan, you may be able to get a new construction loan for a property that is already finished but not yet sold.
You can also apply for an FHA mortgage to purchase a townhome, duplex, or condo. FHA loan rules for condos and related “shared space” type housing differ from suburban homes in a variety of ways-the condo must be on or added to the FHA “approved” list or be given an exception as provided in FHA loan rules found in HUD 4000.1.
Once upon a time all condo projects had to be added to the approved list. Those times have changed.
Mixed use property is also permitted, as long as the property is primarily residential in nature and the non-residential use does not (in general) exceed 25% of the total floor space of the home.
The non-residential use of the home must be “subordinate” to the residential nature of the property. State or local zoning laws will apply, and lender standards may also have a say in whether or not a specific mixed-use type property qualifies.
FHA loans are also available for mobile homes, modular housing, and manufactured homes. Manufactured housing has an age requirement; no manufactured homes or mobile homes made before June 15, 1976 do not qualify for FHA home loans.
There are additional requirements for this type of housing-it must be affixed to an approved permanent foundation and be classifiable as “real property” even if it is not taxed as such.
FHA home loans are, unfortunately, not available for recreational vehicles, houseboats, or any other type of vehicle that is not able to be affixed to a permanent foundation. Vehicles (even houseboats) cannot be classified as “real property” and therefore are not eligible for FHA mortgages.
If you have questions about the kind of home you want to purchase with an FHA mortgage, talk with a loan officer to see what may be possible in your state and your housing market.
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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