Selling Your Home FHA? Learn These Tips to Ensure a Smooth Closing
Before an owner can market a property to buyers that want to use a FHA loan, they will want to familiarize themselves with the FHA's standards. The Federal Housing Authority will not insure loans on just any property. While their standards are not as stringent as they used to be, a home needs to be in relatively good condition to qualify for FHA financing.
Location and Lot
To qualify for FHA financing, the property needs to be located on a road or easement that lets the owner freely enter and exit. Additionally, access needs to be paved with a surface that will work all year. For example, a long dirt driveway that washes out in spring will not qualify. The FHA also wants the lot to be safe and free of pollution, radiation, and other hazards. For that matter, it also needs to provide adequate drainage to keep water away from the house.
Property Exterior
The FHA's requirements for making a loan start with the home's roof. To pass, the house must have a watertight roof with some future life left. In addition, if the roof has three or more layers of old shingles, they must all be torn off as part of the replacement process. The property's exterior must be free of chipped or damaged paint if the home has any risk of having lead paint. Its foundation should also be free of exterior (and interior) damage. It also needs full exterior walls.
Property Interior
The property's interior also needs inspection. FHA standards require that the home's major systems are in good working order. Bedrooms should have egress routes for fire safety, and the attic and basement should be free of signs of water or mold damage.
The bottom line is that the FHA wants to make loans on homes that borrowers can occupy. This does not mean that a home is in perfect condition for an FHA mortgage-using borrower. Contact an advisor at Bond Street Mortgage to discuss these issues as well as any other questions regarding the sale of your home.
Frequently Asked Questions
The property must be located on a road or easement that allows free entry and exit, with paved access suitable for year-round use. It must also be safe, free of hazards like pollution or radiation, and have adequate drainage to keep water away from the house.
The home must have a watertight roof with some remaining life, and if there are three or more layers of shingles, all old layers must be removed during replacement.
The exterior must be free of chipped or damaged paint if there is a risk of lead paint, and the foundation should have no exterior or interior damage with full exterior walls.
Major systems must be in good working order, bedrooms should have proper egress routes for fire safety, and attics and basements must be free of water or mold damage.
No, the home does not need to be perfect but must be safe and habitable for borrowers to occupy under FHA standards.
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