Low down payment requirements, potential for down payment assistance, flexible credit guidelines...yes please! Millennials, first-time buyers and many people who wish to become home owners could benefit from all of those options, and they can get them from the Federal Housing Administration (FHA).
But the FHA doesn’t just give home loans away. Don’t be bummed about that, just be prepared!
Yes, there are requirements for qualifying for an FHA loan. Among them is having the property you wish to buy appraised and inspected. The appraisal will determine the market value of the property, and the inspection will verify that the property meets the FHA’s minimum health and safety standards. Any issues that fall outside of the FHA’s minimum standards will need to be squared away prior to closing.
The good news is that in most cases, property issues uncovered during an FHA appraisal can be resolved easily. Here are the 5 most common issues and how they can be fixed prior to loan approval to keep your dreams of home ownership alive!
Due to lead paint concerns, the home cannot have any evidence of peeling or chipping paint.
Commonly Found In: Homes built before 1978.
Resolution: Repainting or removal of all existing paint is required.
All outlets, lights, plumbing, appliances and heating and cooling systems must be operable and turned on at the main power source prior to the inspection.
Commonly Found In: Vacant properties, real estate-owned properties, short sales, pre-foreclosures.
Resolution: Faulty utility fixtures and systems must be repaired or replaced.
The U.S. Department of Housing and Urban Development (HUD) and some conventional investors require that barred bedroom windows without exterior access must have security release latches.
Commonly Found In: Garden units and street-level properties in urban areas.
Resolution: Windows without security release latches must be modified.
To comply with HUD property safety standards, all steps and stairways must have handrails.
Commonly Found In: Properties with more than one floor or elevated/lower-level entrances.
Resolution: Handrails must be installed near steps and stairways that don’t have them.
WELL, WATER SUPPLY AND SEPTIC SYSTEMS
The well or septic tank and leach lines must be equipped, identifiable and an acceptable distance from property lines and sources of pollution.
Commonly Found In: Older properties, rural properties.
Resolution: These systems must be updated or replaced if they fail a water well test.