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What FHA Home Buyers Need to Know About Property Condition

FHA home buyers in New Orleans

FHA Home Buyers

For single family home purchases under $275,665 ($352,950 for doubles), most of our home buyers are choosing FHA mortgages to finance their homes. FHA loans only require a 3.5% down payment, so it’s a good option for first time buyers who don’t have a stockpile of cash in their savings accounts.

We see a lot of buyers that are willing to invest some sweat equity in their home to make it picture perfect. But, opting for FHA financing means that the condition of the property must meet certain criteria for safety, security, and sanitation. Not every home on the market is going to fit these requirements.

What warning signs should you look for?

There are several common defects that will disqualify a property from FHA financing. Here’s a short (but by no means all inclusive) list:

  • Peeling paint
  • Rotted wood
  • Unfinished or unpainted millwork and trim
  • Raw sheetrock (unpainted)
  • Active termites
  • Faulty or defective mechanical systems (electrical, plumbing or HVAC)
  • Leaking roofs or roofs with less than 2 year remaining life
  • Porches or stairs without handrails and/or railings
  • Security bars on bedroom windows or doors (if they don’t have a quick release lock system)
  • Crawl spaces under raised houses that are full of trash, debris or standing water

If a seller is willing to correct the defects, the house can be approved for FHA financing. But that’s a discussion your agent should have with the listing agent before you spend money on inspections and an appraisal.

Hey, you didn’t send me this house, but I found it on Zillow

It’s important to have an honest conversation with your agent about financing before you start sending them hundreds of homes you’d like to see. There’s nothing like thinking you’ve found the holy grail of first time homes only to discover that you can’t get the financing. We can guide you through that process, by weeding out the unsuitable properties, so you won’t be disappointed.


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New Orleans REALTORS providing home buying, selling, and rental services throughout the metropolitan New Orleans communities.

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