FHA
Property Types

The Federal Housing Administration (FHA) provides mortgage insurance on loans made by FHA-approved lenders to borrowers for purchasing or refinancing various property types. To qualify for FHA financing, a property must meet certain eligibility criteria. Here are the primary types of properties eligible for FHA loans:

Single-Family Homes (1-4 Units)
– Single-family homes are the most common property type eligible for FHA loans. These include traditional detached houses where only one family resides.

– Duplexes, triplexes, and fourplexes (multi-family homes with up to four units) are also eligible as long as the borrower occupies one of the units as their primary residence.

Condominiums
– Condominiums can qualify for FHA loans, but the condominium project must be FHA-approved. The approval ensures that the condo development meets certain standards related to safety, owner-occupancy ratios, and financial stability.

– Condo units must be part of an approved list or receive approval via FHA’s “spot approval” process.

Townhouses
– Townhomes can also be eligible for FHA loans, provided they meet certain criteria, such as being within an FHA-approved community or development. Like single-family homes, the borrower must use the townhome as their primary residence.

Manufactured or Mobile Homes
– Manufactured homes (also known as mobile homes) are eligible for FHA financing if they are permanently affixed to a foundation and meet certain property standards. The home must also comply with HUD (Department of Housing and Urban Development) guidelines.
– It must have been built after June 15, 1976, and classified as real property (not personal property). The land it sits on can be purchased with the loan or leased for an extended period.

Modular Homes
– Modular homes, which are built in sections and assembled on-site, can also qualify for FHA loans. They must be placed on a permanent foundation and meet the same standards as single-family homes to be FHA-eligible.

Planned Unit Developments (PUDs)
– PUDs refer to a type of residential community that is a mix of different housing types and includes shared common areas like parks or recreational spaces. Properties within PUDs can qualify for FHA loans, provided they meet specific FHA guidelines.

Mixed-Use Properties
– FHA loans can be used for properties that combine residential and commercial use, as long as the commercial portion of the property does not exceed 49% of the total square footage and the residential portion is the borrower’s primary residence.

FHA Property Eligibility Criteria
– Primary Residence
The property must be used as the borrower’s primary residence. Investment properties are generally not eligible for FHA loans unless one of the units is owner occupied.
– Property Standards
The property must meet FHA’s minimum property standards, which focus on safety, security, and soundness. This typically involves an FHA-approved appraisal to ensure the property is in livable condition.

– Occupancy Requirements
The borrower must intend to occupy the property within 60 days of closing and reside there for at least one year.

FHA does not approve the following property types:
– Investment properties: Homes purchased with the intention of renting or flipping(unless one unit is owner occupied).
– Commercial properties: Buildings used for business or professional purposes.
– Vacation homes: Properties intended for seasonal or recreational use.
– Time-share properties: Properties shared by multiple owners for a specific period each year.
– Properties with deferred maintenance: Homes with significant structural or systems issues, such as foundation damage or outdated plumbing.
– Properties without a clear title: Homes with unresolved legal issues or liens.

FHA loans provide flexibility for borrowers and can be an ideal option for those purchasing properties that might not qualify for conventional financing due to their condition or other factors. 

It’s essential to consult with a lender to ensure your property qualifies for an FHA loan and meets all requirements.