Articles in Category: FHA Guidelines

July 22, 2026

FHA Loans And Surplus Land

What do FHA loan rules say about surplus and excess land? For someone shopping for a condo unit, this issue typically won’t come up. But for buyers considering homes in rural areas or on larger lots, excess or surplus land can become an important detail once the appraisal is ordered. FHA guidelines address appraisals where surplus land or excess land may be present, and while the guidance is brief, it outlines what borrowers and appraisers can expect in these situations. The central question FHA rules focus on is how the extra land affects the appraised value of the property, and ultimately, how much of that land the lender can count toward the home’s value for mortgage purposes. What Is The FHA Definition Of Surplus Or Excess Land? FHA guidelines define | more...

June 15, 2026

FHA Loan Rules For Part-Time Income

By Bruce Reichstein

FHA loan rules require the lender to verify employment and income. The lender must determine that a borrower’s income is stable, documented, and reasonably likely to continue. But what kinds of employment income can be used to qualify for an FHA mortgage? A reader once asked about a young borrower who held two receptionist jobs. One position had lasted more than two years at approximately 15 hours per week, while the second had lasted a little more than one year at approximately 20 hours per week. Could both incomes be used as qualifying income? The answer depends on how each job is classified and whether the income meets FHA requirements. Primary employment is the borrower’s principal job and is generally full-time, salaried or hourly. Part-time employment generally refers to work | more...

January 7, 2026

FHA Appraisal Rules On Peeling Paint

By Bruce Reichstein

Does peeling paint cause FHA loan problems? Yes—peeling paint can delay or prevent FHA loan approval, depending on the age of the home and the severity of the condition. FHA appraisal rules treat defective paint as a potential health and safety issue, not merely a cosmetic concern. Why FHA Appraisers Flag Peeling Paint FHA appraisal standards focus on: Borrower safety / Property durability and Loan collateral protection Peeling, chipping, or flaking paint can signal deeper problems and must be evaluated carefully. FHA Peeling Paint Rules for Homes Built Before 1978 Homes built before 1978 fall under federal lead-based paint regulations. If peeling paint is present: The appraiser must require repairs, lead-safe work practices must be used and repairs must be completed before FHA loan endorsement. Sellers must disclose known lead | more...

June 17, 2025

FHA Loan Rules: How Inducement To Purchase Rules Affect Your Loan

By Joe Wallace

Do you know how FHA loan rules for inducement to purchase can affect your FHA loan transaction? We often discuss the basics about FHA home loan requirements, and especially in the area of seller rights and responsibilities, but there are other issues associated with inducements to purchase you should know about aside from the obvious issues. What kind of requirements? Many know that sellers may contribute up to six percent of the sale price of the home toward the borrower’s closing costs. But the FHA’s six percent rule (no interested party contributions above six percent of the sale price of the home without a corresponding reduction in the home loan amount) is just one factor. There are other inducements to purchase that can also result in a reduction of the | more...

June 10, 2025

Is A Property Eligible for an FHA Mortgage Loan If It Has Asbestos?

By Bruce Reichstein

Borrowers interested in purchasing older properties using an FHA insured mortgage could face several challenges depending on the nature of the property. For example, some buildings insulated or otherwise constructed with asbestos products could pose a health hazard. FHA rules include minimum property requirements for safety, which address situations like these. Is a property eligible for an FHA loan if it has asbestos in it?

May 27, 2025

How Do I Refinance My Home Loan?

By Bruce Reichstein

Are you planning to buy your first home and wondering about your refinance loan options later down the line? Do you already own a house you need to refinance? Good news: refinancing with an FHA mortgage can help you lower your mortgage payment, get out of an adjustable-rate mortgage, or even renovate your house. What does it take to refinance a home loan with an FHA mortgage? Choose The Refinance Loan You Need There are several FHA refinance loan options. If you need to remodel or repair your home at the same time you refinance, you can apply for an FHA 203(k) rehab loan that provides funds for approved upgrades and improvements. However, the FHA rehab refinance loan (also available as a forward mortgage to purchase a fixer-upper) is not | more...

April 18, 2025

Before You Fill Out FHA Home Loan Forms

By Joe Wallace

Are you ready to apply for an FHA mortgage? You’ll want to make sure you have done a few important preliminary steps before you submit an application. The most basic thing to start with is knowing what type of home loan you need. If you plan to buy a condo unit your FHA loan will be a different variety than if you need to buy a manufactured home, for example. That may sound like some of the most basic home loan advice out there, but what is not so basic is knowing that there are nuances for some of these loans you need to know. A condo unit must typically be part of a project that is on or added to the approved list for FHA loans. But did you | more...

March 31, 2025

Are Military Members Eligible For FHA Mortgages?

By Joe Wallace

One common question about FHA loans involves whether or not military members are eligible to apply. Depending on circumstances, some military members may choose FHA mortgage options over VA loan benefits. What do FHA loan rules tell lenders about veterans and currently serving members of the U.S. military? HUD 4000.1 contains the rules that apply in these cases. One reason some might mistakenly assume military borrowers might not qualify for FHA mortgages is the FHA’s occupancy rule for new purchase loans and refinances. But FHA loan rules include the following on occupancy for military applicants: “Borrowers who are military personnel, who cannot physically reside in a Property because they are on Active Duty, are still considered owner occupants and are eligible for maximum financing if a Family Member of the | more...

November 7, 2024

Will Your FHA Home Loan Be Approved?

By Joe Wallace

Will your FHA home loan be approved or denied? There are several reasons why your loan application could be turned down, and some of those reasons have more to do with the property than with the borrower’s credit history or FICO scores. And in some cases, getting turned down for a mortgage is the borrower’s fault due to credit history or FICO score issues. But what about when the borrower’s credit, employment, and other qualifying factors are acceptable to the lender, but the home loan application is turned down anyway? For some, it could be a question of the property’s condition, location, or type. Location Counts Some don’t realize at first that to be approved for an FHA residential home loan, the property cannot be situated within a specific range | more...

September 25, 2024

FHA Home Loans And First Time Home Buyers

By Joe Wallace

FHA home loans are perfect for many first time home buyers who are looking for low down payment requirements, forgiving credit score guidelines, and a home that features refinance options later down the line for cash-out, rehab and repair, etc. But does a house hunter have to be a first-time home buyer to qualify for an FHA mortgage? The short answer is no. FHA mortgage loans are for any financially qualified borrower, first time buyer or not. That said, first-time home buyers may find an advantage when it comes to local or state down payment assistance programs. FHA mortgages require the down payment to come from approved sources; those sources may include down payment assistance from agencies that provide such funds in accordance with FHA requirements. Down payment assistance must | more...