Articles Tagged With: FHA Appraisals

December 1, 2017

Can I Get an FHA Home Loan For a Commercial Property?

Can I get an FHA home loan for a commercial property? The answer to this question is more complicated than a simple yes or no-much depends on what local zoning laws will allow, and how “residential” the property is. FHA home loans are not just for typical suburban homes. There are a wide variety of house hunters, all looking for different types of properties to suit their needs, and there are plenty of options available aside from the suburban home. A two bedroom home in the suburbs may not be right for borrowers looking for a new home close to work in the city, or for those interested in a different type of residence than a standard house. FHA insured mortgages are available for condos, duplexes and manufactured homes. FHA | more...

November 30, 2017

What Are The FHA Appraisal Rules For Mobile Homes?

By Bruce Reichstein

What are the FHA appraisal rules for mobile homes? FHA mortgages are available for mobile, manufactured, and modular homes the same as for “stick built” housing such as a typical suburban home. What are the basic appraisal requirements for mobile homes? FHA loan rules for appraisals are found in HUD 4000.1, the FHA loan handbook. There we learn that mobile homes have some unique appraisal requirements. Like condo loans, there are extra rules due to the unique nature of mobile homes. FHA Mobile Home Minimum Size Requirement For example, in HUD 4000.1, we find no minimum square footage requirement for a stick-built home or a condo. But for mobile homes, FHA appraisal requirements include a minimum 400 square feet of floor space. Anything less does not meet the FHA loan | more...

November 29, 2017

Appraising the Foundation and Basement: FHA Loan Standards

By Bruce Reichstein

What are the FHA loan standards for appraising the foundation and basement of a home to be purchased with an FHA mortgage? The FHA appraisal process is designed to insure that specific standards in this area are met. When problems are detected in an appraisal, they are noted for correction or other appropriate action. The appraisal process covers everything from the electrical system to the roof-the home and its various systems must be within a certain range of good repair and sustainability. For example, there can’t be exposed wiring in the home that would pose a hazard to the future occupants. The roof must not leak or otherwise allow moisture to enter the house. When it comes to the standards for foundations and basements, the FHA has a clear set | more...

November 29, 2017

FHA Loan Rules For Loan Approval: Federal Debts and Tax Liens

By Joe Wallace

FHA loan rules for loan approval include instructions to the lender about unpaid federal debts and tax liens. Your chosen participating FHA lender is responsible for verifying your income, employment record, and your monthly financial obligations-which may include tax obligations such as a lien, or a federal debt. Unresolved taxes and federal debt can be a serious issue that will affect a home loan application. The status of such debt is one of the most important factors. According to HUD 4000.1, “Mortgagees are prohibited from processing an application for an FHA-insured Mortgage for Borrowers with delinquent federal non-tax debt, including deficiency Judgments and other debt associated with past FHA-insured Mortgages.” The FHA loan rules in this section also add that the lender is required to determine “whether the Borrower(s) have | more...

November 22, 2017

What Are The Property Requirements For An FHA Home Loan?

By Joe Wallace

What are the property requirements for an FHA home loan? There are some basic minimum standards listed in HUD 4000.1 that can help future FHA loan applicants understand the basics, but it’s important to remember that local building code, health standards for water and sewage, and other regulations may also apply. General FHA Loan Requirements For Homes To Be Purchased With An FHA Mortgage HUD 4000.1 states that it is the lender’s responsibility to make sure “each living unit” has the following features as required in HUD 4000.1: -a continuing and sufficient supply of safe and potable water under adequate pressure and of appropriate quality for all household uses; -sanitary facilities and a safe method of sewage disposal. Every living unit must have at least one bathroom, which must include, | more...

November 9, 2017

Does The FHA Have An Inspection Checklist?

By Bruce Reichstein

Does FHA have an inspection checklist? The question is a popular one, but it reveals a common misconception about the nature of FHA appraisals. It is one that’s extremely important to clarify-the FHA appraisal is NOT a home inspection and shouldn’t be considered one. The FHA Appraisal Is A Tool For The Lender, Not The Borrower In spite of the fact that an FHA appraiser is required to insure the property to be purchased with an FHA home loan meets minimum standards, the real usefulness of the appraisal is NOT for the borrower. The lender uses the appraisal to determine the fair market value of the home and that purpose should be considered its’ primary end result. That means the FHA appraisal is NOT a stamp of FHA approval, or | more...

What Credit Score Is Needed For An FHA Mortgage?

October 26, 2017

What Are The Property Requirements For An FHA Loan? Part Two

By Joe Wallace

What Are The Property Requirements For An FHA Loan? We’ve been examining that question in our last few blog posts. FHA loan rules specify that a home must meet minimum standards in order to be approved for an FHA mortgage. What are those standards? There are many, which is why a qualified FHA appraiser must review the property to make sure it is suitable for a mortgage. General Requirements FHA loan rules in HUD 4000.1 state that the home must be generally safe, habitable, and must have a remaining economic life for the entire duration of the mortgage. However, not all homes are in the same condition when they are sold as brand new houses and some homes are purchased under the FHA 203(k) or FHA 203(h) rehab loan programs. | more...

October 25, 2017

What Are The Minimum Property Standards For An FHA Loan? Part Two

By Joe Wallace

What are the minimum property standards for an FHA loan? We discussed some of the basics in a previous blog post. Now let’s examine what the FHA loan rule book, HUD 4000.1, has to say about the minimum requirements for a home to be purchased with an FHA mortgage. HUD 4000.1 instructs the lender, “The Mortgagee must underwrite the completed appraisal report to determine if the Property provides sufficient collateral for the FHA-insured Mortgage.” “The appraisal and Property must comply with the requirements in Appraiser and Property Requirements for Title II Forward and Reverse Mortgages. The appraisal must be reported in accordance with Acceptable Appraisal Reporting Forms and Protocols.” But the rules get more detailed in this area: “The Mortgagee must confirm that the Structure of the Property will be | more...

October 25, 2017

What Are The Minimum Property Standards For An FHA Loan?

By Bruce Reichstein

What are the minimum property standards for an FHA loan? The short answer is that there is no short answer. FHA home loan rules in HUD 4000.1 require a home to be safe, habitable, and have a “remaining economic life” that will last through the entire term of the mortgage. FHA appraisals are designed to insure these minimum standards are met, but what ARE these standards? FHA Appraisals Are A Tool For The Lender The FHA appraisal is required by HUD 4000.1 to be performed by an independent, qualified fee appraiser who will physically review the property. The appraiser must look at a variety of areas on the property but is not required to step onto the roof, be an expert in electrical or HVAC systems, etc. This means that | more...

October 3, 2017

What Are The FHA Appraisal Rules For Appraisal Transfer?

By Joe Wallace

What are the rules for FHA appraisal transfer? There are times when a borrower wants to switch lenders, and there may be other circumstances that may lead to the question of transferring an existing FHA appraisal. FHA Appraisals And Borrowers Who Switch Lenders FHA loan rules in HUD 4000.1 directly address the question of what happens to the FHA appraisal if the borrower changes her mind and decides to use a different lender. “In cases where a Borrower has switched Mortgagees, the first Mortgagee must, at the Borrower’s request, transfer the appraisal to the second Mortgagee within five business days.” Notice that the FHA loan rules here say “at the borrower’s request”. The transfer of the appraisal is not automatic, and the FHA appraiser is not required “to provide the | more...