Questions to Ask About an FHA Home Loan Before You Apply
March 16, 2023
Are you tempted to build a home instead of buying existing construction? If you want a property that is larger than one living unit, consider buying an existing construction home instead since many lenders who deal in FHA One-Time Close construction loans restrict the project size to a single unit.
If you choose to build instead of buy, you will either need land to build on or you will need to purchase land to build the home on.
If you choose to buy existing construction and decide on a multi-unit home, you’ll want to compare the costs of purchasing a duplex or townhouse compared to that of buying a two-unit property configured differently such as a two-bedroom suburban home.
Are you looking at newer homes or older ones? Assuming you want to buy existing construction with an FHA loan, older properties may have appraisal issues that newer ones do not; but older properties can be purchased with an FHA 203(k) Rehabilitation mortgage and you can repair them with loan funds.
This option eliminates the need for the home to be in “appraisal ready” condition at loan time but it does require you to make the home compliant with FHA standards and local building code as part of the rehab work and as a condition of loan approval.
And if you are buying a newer home but still want to do some improvements without applying for a rehab mortgage, you can always consider an FHA Energy-Efficient Mortgage, which adds extra loan funds specifically for installing energy efficient upgrades to the property such as storm windows and doors, energy efficient appliances, and more.
An FHA Energy Efficient Mortgage can be used with nearly any type of FHA home loan; it is also available with FHA refinance loans. You can even add this to an FHA 203(k) Rehabilitation mortgage to get more mileage out of your home loan.
Other important questions to ask yourself in the loan planning stages have to do with how affordable your loan will be. Do you need down payment help to afford your home loan? If so, begin searching your state and local government official sites for homeowner programs and down payment assistance programs.
The FHA and HUD do not offer these, but your state and local government might, in partnership with area lenders and other agencies. Down payment assistance is sometimes offered on a need basis. In other cases it may be offered to anyone who qualifies for the program as a first-time buyer or a buyer who has not owned a home in three years. Check your local state government to see what programs may be offered in your area.
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January 22, 2025Consider this scenario: you've been in your home for five years or more and you've likely built up a significant amount of equity, and now you might be wondering how to put that equity to work for you. Whether you're dreaming of a major renovation, need to consolidate debt, or want to help a child with college tuition, you have options. Two choices are an FHA cash-out refinance and a home equity line of credit (HELOC).
January 20, 2025The FHA Streamline Refinance offers a refinance option for those who don't want to cash in on their property's equity but instead want a lower payment or interest rate or who need to get out of an adjustable-rate mortgage. This streamlined program, designed specifically for those already in an FHA-insured mortgage, simplifies the refinancing process with fewer requirements and faster approval times depending on the transaction.
January 16, 2025Want to buy a home and thinking about getting an FHA loan? FHA loans are a great way to make homeownership happen, especially if you're a first-time buyer or don't have perfect credit. But you might wonder, "Can I get more than one FHA loan?"
The short answer is, it's tricky. The FHA itself doesn't say no automatically to having more than one loan. But there's a caveat. FHA loans are about helping you buy a place to live in – your main home base. Because of this, and a few other things, getting multiple FHA loans isn't easy.
January 15, 2025Buying a condo with an FHA loan is an option some don’t consider initially, but it’s worth adding to your list of potential property types. FHA loans for condo units traditionally require condo projects to be on or added to the FHA-approved list. Still, changes in policy over the years allow borrowers to apply for FHA loans on condo units in projects not on the list on a case-by-case basis.
December 30, 2024When applying for an FHA loan, lenders will consider more than just your credit scores and history. They also look at other factors affecting your risk profile and the interest rate they offer you.
One factor is occupancy type. For FHA loans, this is straightforward because these loans require owner occupancy. Investment properties aren't eligible. While conventional loans may have different rates for primary residences, second homes, and investment properties, this isn't a concern with FHA loans.
