FHA Minimum Standards

FHA Minimum Standards

The U.S. Department of Housing and Urban Development (HUD) requires that any home financed with an FHA mortgage meets specific Minimum Standards. To secure a loan, the property must be deemed safe, secure, and sound.

The FHA Minimum Standards ensure that the home is safe for its occupants, provides security for the property, and is in good condition without significant physical deficiencies or structural issues. HUD has established criteria for appraisers to assess, including factors such as site conditions, accessibility, and the materials used in construction. These standards vary depending on the type of structure, whether it is a single-family home, condominium, or other property types.

Appraisers complete their evaluations using FHA appraisal forms that detail their observations. This information is then used to determine whether the property meets FHA standards, which subsequently influences the approval or denial of the mortgage application.

Enforcing these Minimum Standards helps protect lenders from potential losses. Since the home serves as collateral for the loan, meeting these standards ensures that it will be easier to sell and potentially command a higher price in the event of a foreclosure. Additionally, knowing that the house is worth more and is a safe place to live encourages buyers to strive to avoid defaulting on their mortgage payments.

Co-signer

A co-signer can aid your mortgage approval by signing alongside you. They don’t own the property, but their credit and finances help secure lower interest rates

Principal

The loan balance is the remaining amount you owe on the mortgage principal, excluding interest. It’s what you need to repay to the lender.

Home Equity Loan

As a homeowner you can borrow money using your home’s equity as collateral. This is called a home equity loan or a second mortgage, as it adds to your main loan

Loan Balance

Your loan balance is the amount you still owe on the original mortgage. Part of your monthly payments goes towards reducing this balance.

Related Questions & Answers

There are no related questions

Related Mortgage Articles

There are no related mortgage articles
avanti way financial logo