There are many different types of real estate available to purchase or refinance with an FHA single family home loan. Did you know that FHA loans are not limited to traditional suburban-type housing? The options you have are as diverse as the kinds of real estate you might consider purchasing.
For example, while an existing construction suburban home is definitely an option with FHA loans, you can also consider a new construction home.
The difference between new construction and existing construction can be technical; new construction properties have generally been completed for a year or less and have never had an owner. So while you may not be interested in a “build-to-suit” new construction loan, you may be able to get a new construction loan for a property that is already finished, but not yet sold.
You can also apply for an FHA mortgage to purchase a town home, duplex, or condo. FHA loan rules for condos and related “shared space” type housing differ from suburban homes in a variety of ways-the condo must be on or added to the FHA “approved” list. If you need assistance determining whether a condo is already on the list or not, use the FHA official site to find out at https://entp.hud.gov/idapp/html/condlook.cfm.
Mixed use property is also permitted, as long as the property is primarily residential in nature and the non-residential use does not (in general) exceed 25% of the total floor space of the home.
The non-residential use of the home must be “subordinate” in nature according to HUD 4000.1 to the residential nature of the property. State or local zoning laws will apply, and lender standards may also have a say in whether or not a specific mixed-use type property qualifies.
FHA loans are also available for mobile homes, modular housing, and manufactured homes. Manufactured housing has an age requirement; no manufactured homes or mobile homes made before June 15, 1976 do not qualify for FHA home loans. There are additional requirements for this type of housing-it must be affixed to an approved permanent foundation and be classifiable as “real property” even if it is not taxed as such.
FHA home loans are, unfortunately, not available for recreational vehicles, houseboats, or any other type of vehicle that is not able to be affixed to a permanent foundation. Vehicles (even house boats) cannot be classified as “real property” and therefore are not eligible for FHA mortgages.
If you have questions about the kind of home you want to purchase with an FHA mortgage, have a conversation with a loan officer to see what may be possible in your state and housing market.