What You Can and Cannot Do With an FHA Mortgage
What kinds of property? Everything from a suburban home, a condo unit, duplex or triplex, and you can even build your home with an FHA One-Time Close construction mortgage. There are also some things you cannot do with an FHA home loan and it’s good to know those things, too before you fully commit to the process.
FHA Loans Are for Homes With up to Four Living Units
Yes, some people do purchase homes with multiple units (no more than four for FHA mortgages) with the intention of living in one of the units and renting out the rest. This is permitted with an FHA mortgage.
And don’t forget that FHA loan limits by county are higher for multi-unit properties than for single-unit homes. Your borrowing power could increase when you purchase a house with more than one living unit.
FHA Loans to Buy and Repair
There is such a thing as an FHA fixer-upper loan. The FHA 203(k) Rehabilitation mortgage is the loan you need to buy and renovate a property using the same loan. No cash back to the borrower is permitted with these loans--the payments made from this loan must go toward the approved projects you’re using the loan funds to accomplish.
FHA Condo Loans
FHA mortgage options include the ability to buy a condominium unit. The same down payment and credit score requirements apply for condo loans as for any other type of FHA single-family home loan.
FHA Mobile Home Loans, FHA Manufactured Home Loans
FHA loan rules include the option to purchase mobile homes, modular housing, and manufactured homes that meet FHA requirements. You will need to have your home fixed on a permanent foundation as a condition of home loan approval.
FHA loan rules also include restrictions on the age of the mobile home and you’ll need to know what the local laws say about mobile-home building code requirements and related issues.
FHA Loans for Investment Property
In general, FHA single-family loans cannot be approved for property the buyer does not plan to live in as their primary residence. And there are other restrictions even if you DO plan to live on-site. For example, FHA loans are not possible for property you plan to convert into Air b-n-b, bed and breakfast, or other transient-occupancy operations.
Learn How to Meet FHA Requirements
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