Written by - February 26, 2023
As a mortgage expert, I can definitely help answer the question: What types of properties qualify for FHA loans? First and foremost, it's important to understand that the Federal Housing Administration (FHA) does not lend money directly to borrowers; instead, it insures loans that conform to its standards which are offered by private lenders. FHA loans have become increasingly popular in recent years, especially among first-time homebuyers who are looking for low down payment options.
So, what types of properties can qualify for an FHA loan? Here's what you need to know:
Single-family homes are the most common type of property that qualifies for an FHA loan. A single-family home is a detached property that is designed to house one family and is not attached to any other properties. With an FHA loan, you can buy a single-family home with a down payment as low as 3.5%, making it a great option for anyone looking to purchase their first home.
Multi-family properties, such as duplexes, triplexes, and fourplexes, can also qualify for an FHA loan. The key requirement here is that the borrower must live in one of the units as their primary residence. This is known as being an owner-occupier and is a requirement for all FHA loans. With a multi-family property, the borrower can use the rental income from the other units to help offset their mortgage payment.
Manufactured homes, which are also known as mobile homes or trailers, can qualify for an FHA loan as long as they meet certain requirements. The home must be classified as real estate and be affixed to a permanent foundation. Additionally, the home must be built after June 15, 1976, and meet certain safety and livability standards.
Condominiums can also qualify for an FHA loan, but there are certain requirements that must be met. The condominium complex must be on the FHA-approved list, which means that it meets certain standards for financial stability, safety, and livability. Additionally, at least 50% of the units in the complex must be owner-occupied.
Section 232 properties, which include nursing homes and assisted living facilities, can also qualify for an FHA loan. These properties are eligible for FHA financing because they provide housing or healthcare services to people who are elderly or disabled.
In summary, FHA loans offer a variety of options for borrowers looking to purchase a home or other eligible property. Here are some key takeaways:
If you're interested in learning more about your options for FHA loans, I recommend reaching out to FHA loans Pro . As a leading provider of FHA loans, they can help guide you through the process and answer any questions you may have.