When considering purchasing a home, understanding the FHA loan requirements is crucial. The Federal Housing Administration (FHA) offers mortgage insurance on loans made by approved lenders, making home buying more accessible. However, different types of properties have specific requirements. Here’s a comprehensive look at FHA loan requirements for various property types.

1. Single-Family Homes

A single-family home is the most common type of property purchased with an FHA loan. The FHA guidelines state that:

• The home must be the borrower’s primary residence.
• The property must pass an FHA inspection to ensure it meets safety and quality standards.
• The maximum loan limit varies by county, so it’s essential to check local limits.

Borrowers must also have a credit score of at least 580 to qualify for a 3.5% down payment, while those with scores between 500 and 579 may still qualify with a 10% down payment.

2. Multi-Family Homes

FHA loans can also be used to purchase multi-family properties, such as duplexes, triplexes, and four-plexes. Requirements for these properties include:

• The borrower must occupy one unit as their primary residence.
• Each additional unit's rental income can help qualify for a larger loan.
• The property must still meet the FHA’s minimum property standards.

As with single-family homes, the borrower’s credit score and loan limits apply.

3. Condominiums

FHA loans can be used to purchase condos, but there are additional criteria to consider:

• The condominium project must be FHA-approved. This can be verified through the FHA’s online database.
• Individual units must still meet the safety and quality standards enforced by the FHA.
• Association fees and regulations should be assessed as they can impact loan eligibility.

Having a credit score of at least 580 for a lower down payment remains essential.

4. Manufactured Homes

Manufactured homes can also be financed with an FHA loan, but there are specific guidelines:

• The home must be permanently affixed to a foundation and classified as real property.
• It must meet FHA minimum property standards.
• The borrower must occupy the home as their primary residence.

Additionally, the home should be at least 400 square feet and built after June 15, 1976, to be eligible for FHA financing.

5. Mixed-Use Properties

Mixed-use properties, which combine residential and commercial spaces, are eligible for FHA loans under certain conditions:

• The property must primarily be residential, with a maximum of 25% of the space designated for commercial use.
• The owner must occupy the residential portion of the property.
• The property should meet FHA standards overall.

These properties may require additional documentation regarding the commercial portion’s income and use.

Conclusion

Understanding FHA loan requirements for different types of properties can simplify the home buying process. Whether you are considering a single-family home, a multi-family unit, a condominium, a manufactured home, or a mixed-use property, being aware of these guidelines can help you navigate your mortgage options effectively. Make sure to consult with an FHA-approved lender to get tailored advice for your specific situation.