July 14, 2023
There are many options for those who want to buy or refinance a home using an FHA mortgage. Did you know that FHA loans feature a choice between fixed and adjustable rate loans, and that you can add energy efficient features to the home you buy or refinance?
These options and many more are option to qualified borrowers who get approved for FHA mortgages.
The choices you have with a new purchase FHA loan are varied. In addition to the type of loan–fixed rate mortgage, adjustable rate mortgage, growing equity mortgage loans and others–you also have a choice of housing available to you under the FHA loan program. You can select a typical suburban home, but are not limited to doing so.
FHA Loan Types: Condos, Manufactured Homes
There are FHA condo loans, rehab loans, new construction loans from participating lenders willing to offer them, FHA mortgage loans for manufactured housing and more.
Some want to know if FHA loans are offered for houseboats or RVs, but unfortunately, this option is not available under the FHA single-family home loan program.
Any home purchased with an FHA mortgage loan must be attached to a permanent foundation at closing. A boat or RV cannot be permanently fixed to a foundation, so these types of purchase don’t qualify.
Mixed-Use, Mixed Zoning Properties
For those who want to purchase mixed-use property or homes that are in areas zoned as mixed residential/business or other types of combinations FHA loan rules require the home to be primarily residential in nature, with no more than a certain percentage of the total area of the home to be used for non-residential purposes in most cases.
If your plans for the home involve using more than half of it for non-residential purposes, an FHA loan may not be the right mortgage for you.
Some mixed-use multi-unit properties (up to four units) may have non-residential use as long as the home meets the above guidelines and FHA minimum requirements.
Adjustable Rate Mortgages
Borrowers who choose to finance with an FHA Adjustable Rate Mortgage may later decide to refinance into a fixed rate FHA mortgage loan instead.
This is definitely possible. So is refinancing into an FHA mortgage from an existing non-FHA loan.
Whether you refinance an existing FHA or non-FHA mortgage, FHA loan rules do not require using the original lender for the new loan. You are free to explore your options with other financial institutions.
Borrowers who buy or refinance loans with an FHA mortgage have the option to apply for an FHA Energy Efficient Mortgage (EEM), which permits extra funds to be added to the loan amount for upgrades and improvements that save money on utility bills and make the home more efficient.
Ask your loan officer about your EEM options or any other choices mentioned above.
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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