2015 FHA Guidelines



Eligible Properties


Basic Eligible Properties

FHA loans may be applied to many kinds of residences, such as primary residences with up to four units, condominiums, manufactured homes, precut homes, modular homes, rural properties and planned urban developments.

Properties With 3-4 Units

Generally speaking, three- and four-unit properties are bought with the intention of renting to tenants. In order to buy such a property with an FHA loan, your mortgage payment must be covered by your net rental income. Even if you don't have renters lined up, an appraiser can estimate how much the vacant units go for in the current market, and therefore determine your potential income. Income and credit requirements still apply, and you also need 3 months' of mortgage payments saved up, which must be your own money.

Manufactured Homes

Both single and double-wide manufactured homes may be backed by FHA loans, but the following requirements must be met. The home's construction must get approval from the Federal Manufactured Home Construction and Safety Standards, and must have been built after June 15, 1976. The home's living space must be at least 400 square feet. In addition, the home may only be classified as real estate and the land has to be owned as well. Any home secured with an FHA loan must also include the land, and may not be on wheels, must have a slab foundation, must have utility connections and may not have been moved from or lived in at any other location.

Rural Properties

Rural property may also qualify for FHA mortgages, but only the value of the property's first 10 acres may be backed. The home must also be located on those 10 acres.

Condominiums

While you may receive an FHA loan for a condominium, the unit's complex must meet the FHA's clearinghouse approval. To find condominiums that are FHA-approved, you can go to the website and search by state, condo name or zip code. FHA requirements dictate that an eligible condo must have at least 51 percent owner occupancy and that at least 90% of the condos must be sold. Additionally, no one person may own more than 10% of the units in the complex. There may be no legal action going on with the building at the time of application and there must be both a reserve plan and a reserve fund connected to the homeowners' association, both of which must be separate from regular operating expenses.

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