FHA loans are the type of loans people choose for their home loans when they cannot afford to put down 20% of the down payment. People that choose an FHA loan have to get insurance to minimize the risk of default that the lender faces when granting this type of loan.
Sellers used to be reluctant to accept an offer from a buyer using an FHA loan because they required too many repairs before the loan could close. Many times, sellers would end up paying for the FHA repairs, but today, the FHA repair guidelines have eased up and sellers are not the ones necessary to handle these repairs anymore. Here is a look at what type of repairs are required for the FHA loan.
Who handles the repairs?
Fortunately for sellers, they don’t always have to do the repairs for FHA loan buyers anymore. Depending on the buyer’s purchase offer, a buyer’s agent can specify a dollar cap on repairs that the seller will agree to do.
That helps with easing the concerns of the seller that doesn’t want to take an offer from a buyer with an FHA loan. The seller can also have the buyer be responsible for handling the FHA funding condition repairs that is called for in an appraisal.
What repairs are necessary for FHA loans?
The biggest concerns for FHA’s are health and safety issues. They want to protect the security of the property and structural soundness of the property. If an addition or remodel is not finished to code, the FHA may require they be brought to code or they simply won’t consider the value of the non-permitted item in the appraisal.
Before closing a loan, your FHA loan will require the following repairs to be completed:
- Exterior doors that don’t open or close properly
- Peeling paint in homes older than 1978
- Major plumbing issues or leaks
- Ripped screens
- Leaning or broken fence
- Active and visible pest infestation
- Foundation defects
- Wet basements
- Rotting out building
- Exposed wiring or uncovered junction boxes
- Inoperable HVAC systems
- Leaking or defective roofs
- Missing or inoperable appliances
- Bedrooms missing minimize-sized windows or with bars that don’t release
- Standing water evidence in crawl spaces
- Empty pools or those without a working pump
Your FHA loan may ask for other repairs but they don’t have to be done before closing. This would include items like cracked glass in windows, missing handrails, removal of debris under the home, minor plumbing defects or worn out carpeting.
FHA loans require the home be safe and healthy before closing a loan.
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