Is there a size requirement for FHA loan homes? Some borrowers may have concerns about size issues, and while there are some rules on the books that affect FHA loan transactions in terms of size, not all guidelines apply to all housing types.
In fact, FHA loan rules often leave certain details of the appraisal process up to the local authority; the FHA does not try to regulate every single state of the appraisal process or try to anticipate all potential issues. State and local laws play an important part in the appraisal process.
FHA Loan Rules and State/Local Building Code
FHA loan rules covering all aspects of the appraisal process are found in HUD 4000.1, the FHA single family loan program handbook. But these rules aren’t the only ones that must be satisfied; even if a home meets FHA minimum standards, if it does not live up to the applicable building codes it may not be suitable for an FHA mortgage.
If state or local ordinances specify certain minimum size requirements, the property would be required to live up to those rules or be brought into compliance as a condition of loan approval.
Size Issues As A Matter Of Safety?
In some cases the issue of size (or configuration) may have to do with overall safety of the property depending on circumstances. Local ordinances may have certain requirements for fire escape issues, sufficient height of ceilings and entryways, etc.
What may ordinarily be a question of aesthetics could, in certain locations, be viewed as a safety-related concern. Keeping in mind that code requirements are just as important as FHA minimum property standards, that could become an important factor in determining the property’s suitability for an FHA mortgage loan.
FHA Home Loan Rules On Property Size
There are FHA loan rules that discuss a home’s ability to be approved for an FHA mortgage when “excess land” or “surplus land” exists, but then there are FHA loan rules that directly address the physical size of the home.
In most cases, condo units and stick-built housing have no FHA-defined size requirements. But for those interested in an FHA mobile home loan or manufactured home loan, the FHA and HUD have both size requirements and property age restrictions.
HUD 4000.1 states that manufactured homes cannot have a manufacturing date older than June 15, 1976. The same section that defines this rule also states that to be approved for an FHA mortgage, the manufactured home must be 400 square feet or larger.
Talk to your loan officer if you aren’t sure how these FHA mortgage loan rules affect your transaction.