An FHA home loan is backed financially by the United States Federal Housing Administration (FHA), a federal agency under the Department of Housing and Urban Development jurisdiction.

FHA home loans are insured by the FHA and are generally available with a relatively low down payment option (around 3.5 percent of the purchase price) and lower minimum credit score limits. However, FHA home loan applicants need to be prepared to purchase mortgage insurance. Offering a low down payment and less stringent credit requirements often means an FHA home loan is attractive for a first-time home buyer. Though, it is worth noting that you do not have to be a first-time home buyer in order to qualify for an FHA home loan.

The requirements to qualify for an FHA home loan include the following: 

• An FHA-approved appraiser must appraise the home you want to purchase.
• An inspection must occur, with the inspection reporting whether the property meets minimum property standards.
• The home you want to purchase must be deemed your primary residence, meaning that it cannot be a second home or an investment property.
• You are required to occupy the home within 60 days of closing.

Yes. In fact, an FHA-specific home inspection is required where an analysis is conducted of your prospective home to determine if there are any structural issues or hazards and makes sure the home is in good livable condition while meeting the FHA minimum property standards. The FHA inspection also verifies the true market value of the home. It is also important to note that the FHA requires an appraisal that is wholly separate and distinct from a home inspection.

Yes, an FHA home loan can be used to refinance the purchase of a single-family home. In addition, you can refinance the purchase of a two-unit or four-unit multi-family home, condominium, and even certain manufactured homes.

Generally, no. If you are applying for a single-family FHA mortgage, then you are expected to occupy the home as your primary residence. The one caveat to this rule can be found in HUD Regulation 4000.1. This provision states that a borrower may be eligible to secure a second FHA-insured mortgage without being required to sell an existing property. The provision allows for eligibility under the following circumstances:

• (i) due to an employment-related reason, the borrower is relocating or has relocated; and the new principal residence will be established or has been established in an area more than 100 miles from their current principal residence or 
• (ii) if a borrower moves back to the original area, then the borrower is not required to live in the original house and may obtain a new FHA-insured mortgage on a new principal residence.

As long as the home is in livable condition, meaning that it can pass FHA appraisal requirements, you have the option to purchase a foreclosed property with an FHA loan.

Generally, yes. This is because the FHA defines “multi-family property” as a property with five or more units. Though, it is important to note that multi-unit properties are required to meet FHA minimum standards and satisfy an FHA appraisal.

If you are in the market for an FHA home loan, consider contacting Rodrigo Ballon and CrossCountry Mortgage to discuss your home loan options. Rodrigo Ballon has been in the mortgage lending industry for close to two decades and has helped more than 4,700 families achieve their home financing objectives.