I have helped many buyers over the last year buy homes in that lower price range. As for the FHA guidelines, you've received some pretty good answers from some of the mortgage brokers who have answered your question. Most of the homes that I have sold to my buyers needed some work but I just closed on one last week for $109k that was a fully remodeled fix and flip property so it needed virtually nothing! So, don't dispair or be concerned about having to buy a wreck of a property in your price range. There are some nice homes available and I know we can help you find one of them. I'm happy to provide you with the my buyer's name and number who just bought the home that I told you about. I'm also happy to send you properties that are in that range for you to view online.
Let me know
Its true that the seller is not obligated to do the repairs, even repairs as required on the appraisal, but in a buyers market, they have more to lose than you do.
If they are unwilling to do the repairs, you can still fall back on the 203k. It takes a little longer, but truly is not difficult when working with an experienced loan officer that knows this product.
Good luck and happy home hunting!
Mark Atteberry, SG Priest Realtors, Louisville KY Home Expert
The house must not represent any health or safety hazards. The way the bank investigates the condition of the property is base on the reports ordered during the transactions and also by any negative comments or recommendations made by the appraisal. If the price range that you can afford is giving you trouble because of the condition of the property I will recommend that you look into a the possibility of purchasing a town home, they are usually located in good neighborhood, surrounded by nice homes for a lot less than the price of a regular home sometimes even with bigger square footage and with the same benefits of the schools and general area. I hope this helps with your questions. Good luck with the purchase of your home.
ps. Also keep in mind that if this is your 1st home you can always move in 5-7 years, but in the mean time you can start with a town home and move up into a house later when ready.
Around here it is there must be plumbing, toilet, kitchen sink, furnace are some of the things that if they are missing or broken fha will not approve these are sometimes missing from foreclosed homes. Your loan person should be able to provide you with guidelines.
Dependin on the home the seller will most likely be faced with additional expenses for repairs and or replacements to do painting, electrical, plumbing, roof, windows, exterior repairs, termites and more. But don't get discouraged because even though FHA is making it a little harder and it may take a little longer, it will only benefit you because you will get a home in much better condition at the end.
With FHA loans you need to work with an experienced agent that can negotiate the deal, find licensed contractors if necessary to have the seller make the repairs and keep the deal alive.
I hope I helped you understand the FHA standards, if you have any questions simply email or call me.
While FHA/HUD does have guidelines for minimum property standards, there is no real reason to be majorly concerned with them, because you can always use an FHA 203k loan which allows you to do the repairs AFTER you own the home.
Contractor Directory for the FHA 203(k) Loan
I have put together a handout which I have linked below which highlights the property condition items which FHA appraisers consider. If there's something specific, let me know and I can research it.
If the property is a Condo, it's important to confirm it's on the FHA approval list at
Even with it being on the approved list, it doesn't guarantee it's still eligible. Today we're seeing more complexes with over 15% delinquency on HOA dues which we confirm in a condo questionnaire as part of processing the loan. Helpful handout link:
Here's another link on HUD's website regarding property condition requirements
Good luck and let me know if I can help further!
Any home MUST BE MOVE IN QUALITY
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
Peeling paint, broken windows, termite damage/infestation, plubming leaks, exposed exterior surfaces, reoof issues, garage door openers, exposed wiring, safety hazards, pool/pool equipment, deferred maintenance"
Also, the 203k is a wonderful option as long as the house appraises and the repaired value.
Keller Williams Az Realty
When you get the desired home appraised, the lender will let you know what they want done (if anything). If they do request something, odds are that they will want it completed before giving you the loan
Keller Williams - DTC
Most of these answers are along the same line. FHA wants you to have a safe house. This means the systems must be functional - electrical, plumbing, heat, water heater and roof. Peeling paint is a concern for FHA because of Lead Based Paint for homes built prior to 1978. If it was built more recently, they want the peeling paint fixed because without it, the wood or raw surface will deteriorate.
Minor health and safety issues can usually be completed with a regular FHA loan with a repair escrow. If the items are outside of the repair escrow guidelines, a 203k is the best solution. It also allows you to finance elective changes - like updating the kitchen or flooring.
You CAN do the work yourself with a 203k or repair escrow, but we need to budget for a contractor in case you get hurt or can't complete the work. Please visit my website or give me a call to learn more. We'd be happy to help you get prequalified.
The appraisor is the person at FHA that will determine if any work needs to be done. On the last house that I sold (fixer upper with FHA) the appraisor wanted splashblocks on the downspouts for the gutters and a new roof. The seller had to put on a new roof.
But one common misconception is that if there is missing carpet or missing appliances you can't get an FHA loan. This is not true. What will happen is the underwriter will want to see that you have enough money to buy the appliances and replace the carpet. If you have nothing saved for these items, an underwriter could be concerned.
But in those types of situations there is also an FHA 203K loan that allows you to finance in the cost of certain improvements when you buy the home. Check out http://www.fhacolorado.ord/fha203k for more information. If you have more specific questions feel free to let me know firstname.lastname@example.org.
Summit Home Mortgage
Your lender and your broker should be able to tell whether they meet such criteria.
As always . Matt Ackerman below is a hud loan expert and is used to this question often...You should call him direct...he is a great resource.
You may also look at HUD properties which have the property condition pre-done. They have a new website http://hudhomestore.com and you can search for properties, then click on Addendum for the report. Look for PCR (property condition report) and you are looking for lots of 'yes'. If there is an amount in Escrow, that will tell you what also needs to be done.
It is possible - I am going out today with some Buyer's who ae in the same position as you and we have a lot of properties to look at.
You also need a good Lender who knows what they are doing. I have a couple of gems if you need someone.
Let me know if you need anymore help, or if would like a free search of properties? You can also look on my website
720 226 4168
The web reference below has your answer in detail. The short answer is that FHA wants the home to be habitable, safe and complete for the new borrower. What you are describing was most likely as a result of an older home with peeling paint that could be lead based paint.
When I am shopping for a home with buyers that are going to get an FHA loan, I look for a functional roof, running water, functional appliances, all windows intact, doors that lock...etc..... In short, it does not have to be perfect but the guidelines want the home to have all functionality and lower risks to the buyer (and lender) at closing.
Listing agents specify in the MLS if a home will likely pass FHA criteria. Its a not a guarantee but a good starting point as you search for your next home. Best of luck with your search.
Unfortunately there is not a published list of items that are not "allowed" to be insured by FHA but suffice it to say that peeling paint, broken windows will complicate/kill the purchase. i just had one fail due to a crack in the patio...
Choosing a HUD home, homepath home or using a 203K loan might be your best option in this price range...You may also wish to simplify and consider a townhome...
Give me a call and we can get you moving in the right direction