Nearly 30 percent of home buyers today are using loans secured by the Federal Housing Administration or FHA — reason enough for home sellers to consider making their homes FHA-friendly. Here are a few tips to help understand the FHA process.
Lending limits. Head to HUD.gov to see if your home qualifies for an FHA transaction. You’ll find the lending limits in your area for an FHA loan and other important information.
Repair issues. FHA guidelines are strict, prohibiting buyers from purchasing homes with serious issues such as structural damage, lead-based paint, a broken heating and air conditioning system or a patchy roof. FHA guidelines require certain repairs to be done for the loan to close. It might be wise to make major repairs before putting the home on the market or being ready to negotiate the cost of repairs with an FHA buyer.
Closing costs. More often than not, an FHA buyer could use a little help with closing costs. While not all sellers are open to this, it might be worth negotiating rather than losing out on a sale.
Be patient and knowledgeable. FHA loans require slightly more paperwork than regular loans and may take a little longer to close, though not always. Be aware that FHA loan rules are different for condos and townhomes. They must be on an approved FHA list, which changes each year. Also, homes seeking FHA approval must be appraised by an FHA-sanctioned appraiser.