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What Qualifies A Home For An Fha Loan ?
Approval from a professional property appraiser, appointed by the FHA, is the foremost requirement for a prospective home to qualify for FHA loans. |
The appraiser’s duty is to ensure that the house does not have any safety or health issues for the potential buyer. He also has to deduce an estimated value of the home based on a number of factors to confirm that the buyer does not get a raw deal.The estimate of the house’s value is also to guarantee the lender that in case of failure to pay loan, on part of the buyer, the property can be seized and sold at that value to make up for the loaned amount. Apart from that, home loans are provided for only one to four unit homes by the FHA.
You must approach some other source like a traditional mortgage lender, to finance loans that are meant for five or more than five unit homes.
Under the section 203 (K) of FHA loans, fixed-uppers and handyman specials can also qualify for FHA home loans. In this case, the loan consists of the home’s purchase price plus the amount of repair work needed to make the home livable. These amounts have to be estimated by an appraiser appointed for these purposes by the FHA. The buyer must later deal with a FHA approved lender who deals specifically with 203 (K) loans.
Condominiums can also be eligible for loans provided they meet specific criteria. The condominium must be completely built and must be insured against flood, hazard and liability.
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