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  • The best way to make your property FHA eligible

    Many property buyers these days are guaranteed by Federal Housing Administration (FHA) mortgage loans. Is your sale house up to FHA standards? If not, you are missing out on potential buyers.




    Qualifying your house



    Presently, about 30 homes are guaranteed by FHA, which means you will have more buyers if your home is eligible for it. The FHA mortgage loans are accessible to help make home ownership available to every person and affordable. The U.S. Department of Housing and Urban Development (Housing and Urban Development) is the department where FHA can be found. Lenders do not have to stress about losing a loan and do not assume any risk because an FHA loan is insured.



    Prepare for government approval



    The seller will want to make sure the government will approve your house before buying it, since the FHA loan is common.



    The maximum guarantee in normal areas for an FHA mortgage loan is $271,000, though that can be as high as $729,000 in areas such as San Francisco that are more costly. Anything has to be within the FHA price guidelines after the buyer pays the 3.5 percent down payment.



    To be able to make sure the property is in a good condition, it is best to get an inspection before the FHA property inspector comes. This will help you save on costs. You might need to fix some things before the property could be FHA approved, but the inspection is needed to make sure all safety, health and building laws have been followed.



    Finally, it is a good idea to give the offer to help pay for closing costs on the house. The market is a competitive buyer's market today, which means that sellers have to do whatever they can to stand out from the crowd. The FHA allows sellers to pay up to 6 percent of total closing costs on the buyer's behalf. This can surely help you sell quicker.



    Rejected for various reasons



    Here are a few definite red flags that the FHA will use to deny financing:



    Properties where encroachment is at issue - The FHA will not issue a loan to a house where a structure on the house, such as a garage or shed, is owned by a neighbor or other third party.



    Unfinished homes - In order to make sure all these rules apply, an inspector will be sent the house. It cannot have any holes in the roof or walls and must have plumbing and hot water. The home has to be habitable or else the loan will not go through.



    Rental or investment properties - Only owner-occupied homes or getaway homes will be financed by the FHA. If there's a rental unit on the house, the FHA will not probably write a mortgage for your buyer.



    Sources


    Department of Housing and Urban Development

    Making Home Affordable

    Money Crashers

  • #2
    Thanks for sharing the informative post.

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