Not every house available for sale is new construction or ever recent construction. Appraisal issues for houses that haven’t existed very long can be much different than for houses a few decades old or older.

FHA.com: Home Purchase and Refinance Loans

FHA Loan Programs for 2024

The most recognized 3.5% down payment mortgage in the country. Affordable payments w/good credit.

Are You Watching Your Credit Score?




- Improving Your Credit Score Has Never Been More Important -

FHA.com is a privately owned website, is not a government agency, and does not make loans.
FHA Home Loans

Choose a Loan Type

FHA.com is a privately owned website, is not a government agency, and does not make loans.

FHA Loan Tips for Buying Older Homes

June 9, 2024

rehab-a04-666c76aee0f92.png
Not every house available for sale is new construction or ever recent construction. Appraisal issues for houses that haven’t existed very long can be much different than for houses a few decades old or older.

What do you need to know about FHA loans for older homes before you get started? We cover some key points below.

Flexible FHA Loan Options

There’s no single FHA mortgage option because so many different housing options and scenarios are available. Want to build a home where none exists now? There’s an FHA loan for that. Want to buy an old, worn-out property and breathe new life into it as a newly renovated home?

There’s an FHA loan for that, too.

We mention all that to say that if you find an older home on the market, don’t assume it must be in full compliance with state and local building codes at appraisal time.

Why?

Choosing the Right Option

While that scenario (finding a house that doesn’t need much, if any, repair work) may work fine with FHA 203(b) purchase loans, the FHA 203(k) rehabilitation loan is specifically for purchasing a fixer-upper home to renovate, including older houses.

That means you won’t have to “pass” the appraisal process similarly. Once the renovation work is done, the home loan is approved based on the property's completed value.

That’s a feature you don’t get with an FHA 203(b) loan to buy an existing home, which must pass the appraisal as-is or be repaired to bring it into compliance.

Age Limits on Older Homes?

FHA loan rules say manufactured housing can’t be approved for an FHA mortgage if it is too old. That is not the rule for purchasing a typical suburban home with an FHA mortgage.
 
An existing house, condo, duplex, or similar “stick-built” home will not have an age requirement as an FHA mobile home loan does. The condition of the property will be key, not its age.

What to Know About FHA Mortgages for Older Homes

If you know the home needs serious work and still want to purchase it, don’t waste time applying for an FHA purchase loan in the 203(b) program. Instead, ask the lender for the FHA 203(k) rehab loan option.

If you want to buy a fixer-upper, keep in mind that in some parts of the country, supply chain issues and permit processing times may affect the timeline of your project. Be sure you know the issues in your housing market before committing for best results.

------------------------------

Learn About the Path to Homeownership
Take the guesswork out of buying and owning a home. Once you know where you want to go, we'll get you there in 9 steps.

Step 1: How Much Can You Afford?
Step 2: Know Your Homebuyer Rights
Step 3: Basic Mortgage Terminology
Step 4: Shopping for a Mortgage
Step 5: Shopping for Your Home
Step 6: Making an Offer to the Seller
Step 7: Getting a Home Inspection
Step 8: Homeowner's Insurance
Step 9: What to Expect at Closing

Do you know what's on your credit report?

Learn what your score means.