Since the FHA allows sellers to contribute up to 6 percent of the loan amount , of course, buyers will ask for help. Many sellers prefer conventional financing or any financing over FHA loans. A seller has the right to refuse any offer, including FHA offers. Sellers refuse offers for a variety of reasons including:. Look at hard money lenders for your financing needs. Despite the name and the reputation they have , hard money loans are a great way to start investing in real estate.
Hard money loans have a variety of benefits including:. FHA loans are great for first-time homebuyers with little money to put down and less than perfect credit. The FHA does not require the repair of cosmetic or minor defects, deferred maintenance, and normal wear if they do not affect the safety, security, or soundness of the home. The FHA says that examples of such problems include, but are not limited to, the following:. However, there are many areas where the FHA does require problems to be remedied in order for the sale to close.
Here are some of the most common issues that homebuyers are likely to face:. The water heater must meet local building codes and must convey with the property.
A number of conditions fall under this category. They include but are not limited to the following:. The property must provide safe and adequate access for pedestrians and vehicles, and the street must have an all-weather surface so that emergency vehicles can access the property under any weather conditions. Any defective structural conditions and any other conditions that could lead to future structural damage must be remedied before the property can be sold.
These include defective construction, excessive dampness, leakage, decay, termite damage, and continuing settlement.
If an area of the home contains asbestos that appears to be damaged or deteriorating, the FHA requires further inspection by an asbestos professional. The home must have a toilet, sink, and shower. This requirement might sound silly, but you'd be surprised what people will take with them when they're foreclosed on, and what vandals will steal from a vacant house.
Anecdotal evidence suggests that the FHA requires properties to have working kitchen appliances, particularly a working stove. However, FHA documents do not mention any requirements regarding appliances.
There are options for homebuyers who have fallen in love with a property that has one of these potentially deal-killing problems. The first step should be to ask the seller to make the needed repairs. If the seller can't afford to make any repairs, perhaps the purchase price can be increased so that the sellers will get their money back at closing. Usually, the situation works the other way around—if a property has significant problems, the buyer will request a lower price to compensate.
However, if the property is already priced below the market or if the buyer wants it badly enough, raising the price to ensure the repairs are completed and the transaction closed could be an option. If the seller is a bank , it may not be willing to make any repairs. In this case, the deal is dead. The property will have to go to a cash buyer or a non-FHA buyer whose lender will allow them to buy the property in the present condition.
Many homebuyers will simply have to keep looking until they find a better property that will meet FHA standards. This reality can be frustrating, especially for buyers with limited funds and limited properties in their price range.
Some homebuyers may be able to gain approval for a different loan product. A non-FHA loan may provide more leeway on what condition the property can be in, but the lender will still have its own requirements. So, this approach may not be successful. Another option is to apply for an FHA k loan , which allows the purchase of a home that has significant repair and maintenance problems.
FHA loans make it easier for borrowers to qualify for a mortgage, but they don't necessarily make it easier to buy a property. If a property does not meet the minimum standards for an FHA loan, many homebuyers will simply have to keep looking until they find a better property that does meet FHA standards—a process that can be frustrating, especially for buyers with limited funds and few properties in their price range.
However, FHA borrowers who know what to expect when home shopping can restrict their search to properties that are likely to meet FHA guidelines, or at least avoid setting their hopes on a fixer-upper property before having it appraised. Department of Housing and Urban Development. I have a mortgage with my private lender, they waived 3 months payments for forberance period. It needs to season for at least three months.
My son was trying to refinance his mortgage through FHA, he had a forbearance which ended in December but the mortgage lender said that they could not refinance his loan because of a loan modification. He was behind on his taxes and I assumed this is why they modified his loan but was still without his knowledge or consent. Hey Gina, I appreciate that you pointed out that in cases like divorce, couples often seek FHA mortgage loan modifications. The other day my friend mentioned that he is planning to separate from his wife.
I will definitely recommend him to have his mortgage reviewed to ensure that he does not lose it. Is there a waiting period? There is a one-year waiting period after a loan modification to qualify for an FHA loan. There is a four year waitng period to qualify for a conventional loan after a loan modification. We are try to refinance our mortgage, we had a loan modification in and in June of Do we qualify for an FHA loan? If so, you qualify. If it was a regular loan modification, then you need 12 timely payments after the modification for you to qualify.
What state are you in? Please reach out to us with your contact information. We are currently going through a modification. Just completed our third trial payment, as of Aug 1, and sent the final docs. We want to sell immediate after the mod becomes permanent. We also want to purchase again. Will we qualify for an FHA loan immediately or will we have to wait 12 months after selling the home? You do not have to wait after the modification is over if you had been timely in the past 12 months.
If not, you need timely payments in the past 12 months.
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