When the Federal Housing Administration was created in the 1930’s, it was created with the idea
in mind to make it possible for a greater number of people to become homeowners. It has
succeeded extremely well in this aspect; in fact, it insures at least fifty percent of all loans given
out today. However, oftentimes when you think of FHA, you think low income or first time
buyers. While this administration certainly offers incentives to people in those situations, they
are by no means the only situations where a person can benefit from what these programs have to
offer. FHA approved homes have their limitations, of course, but they are not as limited as one
Overall Guidelines for Approval
For a home to become one of the FHA approved homes on the market, it has to adhere to the
guidelines that are set forth by the Federal Housing Administration. While these requirements
sometimes change, for the most part the underlying basics stay the same. Any home that
completes the approval process has been determined to be a safe home for a family to live in. It
has also been decided that the value of the home is in line with the amount of the loan that has
been taken out on the home. To determine these two things – safety and value- a home appraisal
is required and will be done prior to closing on the loan. The appraisal is done on all properties
that are going through the federal program, whether they are single family, multi units,
manufactured homes, and everything in between.
In order to determine whether or not a home is eligible for FHA approval, the appraiser will use a
special form which gives him a list of criteria to follow when appraising the home. This form is
called the Uniform Residential Appraisal Report. In it he will be required to fill out the form as
he inspects the home. He will be looking for your standard focus items such as size of the home,
number of bedrooms, bathrooms, etc. He may focus on the age of the home, the type of paint
used if it is an older home, broken windows or doors. He will also be looking for anything that
could indicate that the home is unsafe or will be in need of repairs within a couple of years.
Areas of focus include roofing, flooring, electric, plumbing, the foundation, any type of
dangerous substance on the property, and even pest infestations. As an FHA-approved appraiser
he may also be looking for add-ons such as crawl spaces and hand rails. Basically, it is his job to
make sure the home is livable and valuable since it will become a HUD home if a foreclosure
What Types of Properties can be FHA Approved Homes?
AS mentioned above, Federal Housing Administration programs extend beyond the single family
residence. Loans can be procured on multi-unit buildings, up to four units. You can get a loan on
pre-created homes, so this includes manufactured homes, precut homes, and modular homes.
Loans are also available for condominiums, on rural properties, and for some urban
developments. Each scenario will have a set of requirements that are unique to the scenario, but again, the basics are the same. However, in most situations you will be required to have the
property be your primary residence. If you are purchasing a multi-unit building then you will
have to occupy one of the units. The beauty of this setup is that your options are not limited to
single family residences. There are many approved homes available on the market that do not fall
into the single family category, homes that carry a lot of appeal for the homeowner. If not for the
additional programs set up for these situations, the homes would be unavailable to many buyers.
FHA approved homes can be found through a couple of different methods. You can have your
real estate agent do a search only for loans that have been approved, or you can visit the Federal
Housing Administration website and do a search for homes in the area you are considering.
Regardless of the home you are looking to buy, you will want to consult with your agent and
loan officer to determine exactly what requirements will need to be met before you can get
approval on the loan. You don’t want to fall in love with a property only to discover that it is not
in line with the requirements necessary for approval. It’s best to do your homework so you can
get into a home that you love.