Make Your House FHA – Loan Friendly
Since the Federal Housing Administration (FHA) insures a sizable portion of the mortgage loans used by today’s home buyers, it stands to reason that making your house FHA-friendly will increase its appeal to more buyers. In preparation, you should know some of the basics of FHA loan rules so that you increase your home’s potential to reach as many buyers as possible. First-time home buyers in particular rely on FHA loans to achieve homeownership.
First, the FHA has lending limits, so you need to check prices for your region to see if your home’s listed price falls within the requirements. Note that the limits vary greatly, depending on the state and location. For example, in high-cost areas, the FHA might insure a mortgage of up to $729,750, but only $271,050 in New Hampshire. Find out this information here: https://entp.hud.gov/idapp/html/hicostlook.cfm
Next, the FHA only relies on reports by its approved appraisers. Keep in mind that the FHA appraisal preempts the buyer’s appraisal if there is any conflict. Also, under FHA rules, you must provide the buyer a form explaining the process of a home inspection and why it is different from an appraisal. If the inspection reveals any serious issues, the FHA will block the purchase until repairs address any defects.
Another way to help close the deal with an FHA loan is to offer to pay for some of the buyer’s closing costs. You can make your home stand out in the market through this strategy. The FHA permits the seller to pay up to 6 percent of the total closing costs on the buyer’s behalf. First-time buyers may find this especially appealing and it could help you sell your home faster.
Finally, if you’re selling a condominium, first ensure that your condo is FHA-approved for mortgages. The FHA must approve your condo before a buyer uses an FHA loan to purchase a unit.
For more information about FHA loans, see here: http://portal.hud.gov/hudportal/HUD?src=/buying/loans