FHA loan options for buying a home include choices on the housing type you need, the type of home loan you need, and sometimes even the circumstances of the purchase, in the case of people who are buying homes in federally declared disaster areas. Do you know what your new purchase FHA home loan options are?
FHA Loans Available For Many Types Of Homes
FHA home loans can be used to purchase property that will be owner-occupied residences, but the home can have as many as four living units.
That means the borrower has the option to rent out unused living units if she chooses. Owner occupancy is a condition of loan approval, so you can’t use an FHA loan to purchase an investment property (one you intend to rent without living there yourself).
FHA mortgages can be used to buy condo units, town homes, mobile homes, and other types of property including mixed-zoning or mixed use buildings (as long as those buildings are mostly residential in nature).
FHA Loans For Distressed Properties and Fixer-Uppers
FHA rehab loans allow you to buy a home that is in need of repairs with something known as the FHA 203(k) Rehab Loan (which is also available as a refinance loan).
These are often properties that would not pass an appraisal initially (something the loan rules for this type of mortgage anticipate) but will be renovated to fix those issues and others. FHA rehab loans can be used with other FHA loan options including the Energy Efficient Mortgage, and even in conjunction with the FHA rehab loan for borrowers in federal disaster areas, the FHA 203(h).
These loans must be administered with escrow accounts to pay for labor and materials, and may require compliance inspections after the initial work and review has been accomplished-much depends on the nature and complexity of the work being done.
FHA Loans With Adjustable Mortgage Rates
FHA mortgages are available as both fixed-rate loans and adjustable rate mortgages (ARM loans). FHA ARMs have specific guidelines as to how often and how much the rates can change over the lifetime of the mortgage.
If you are buying a home you don’t plan to own for the entire duration of the mortgage term, depending on your financial goals and other factors an FHA Adjustable Rate Mortgage loan might be an option to explore.
Talk to a loan officer to discuss these options and many others-you can also get pre-qualified for an FHA mortgage loan if you are ready to start house hunting or have already started.