June 22, 2015
One very common question about FHA loans involves the type of properties eligible for a single-family loan. FHA loan rules state that certain types of properties cannot be considered eligible for an FHA loan, including condo-hotels, time shares, and seasonal homes.
One of the sticking points for these properties when it comes to the FHA loan rulebook is that there is either intermittent occupancy (due to the nature of a condo-hotel, for example) or occasional occupancy intended for the home to be purchased with the FHA loan. Unfortunately, in these cases the FHA loan occupancy requirement is often what bars the loan–you are required to be an owner-occupier of the property you buy with an FHA single-family mortgage loan.
But what about properties where the borrower does intend to live full time, but might be vastly different than a traditional suburban home? Can a borrower purchase a Recreational Vehicle or even a houseboat using an FHA single family mortgage?
The short answer is no, these properties do not meet the FHA loan requirements spelled out in HUD 4155.1 (which is still current at the time of this writing, but is due to be replaced with a new volume of FHA loan rules later in 2015). One reason is that all homes to be purchased with an FHA loan must have a permanent foundation.
That includes mobile homes, manufactured homes, and modular properties. No, many of these homes do not have a permanent foundation at the time a purchase is considered. But as long as the home is to be affixed to a permanent foundation and be appraised as such, FHA loan rules do permit the borrower to buy a mobile/manufactured/modular home. Both the home and the foundation must meet minimum property standards and all state/local building codes.
A houseboat simply cannot have a permanent foundation to the nature of its construction. The same is true for an RV, so these two would never be declared eligible for an FHA mortgage loan. A conventional loan may be possible for such things from the right lender under the right circumstances, but that is something the borrower would have to negotiate with the lender.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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