Is Your House FHA-Friendly?

The Federal Housing Administration (FHA) is a valuable tool for homebuyers because it allows buyers with good credit to secure home loans with a down payment as low as 3.5 percent. It's important to keep this in mind when selling your home because around 30 percent of buyers rely on FHA loans to purchase a home and there are rules that govern what types of homes can be purchased with those loans. Is your house FHA-friendly? Making sure that it is will open the bidding to the many buyers who use FHA loans, and more potential buyers are always good news when selling your home.

• Know Your Local FHA Loan Limits and Pick Your Price to Fit Them
  The first step in making your home FHA-friendly is making sure that you price it within FHA guidelines for your real estate market. Note that the right price for an FHA-friendly home can differ quite a bit, depending on where you're selling your home. In markets with high average home values, the corresponding FHA loan limits will also be significantly higher. The same thing is true in the other direction for markets with more modest average home values.
  
  
• Prepare Your Home for Inspection and Address Major Maintenance Issues
  While the home inspection is an important consideration no matter who you're planning on selling your home to, it's an especially key factor for selling to FHA-approved buyers. The FHA won't approve a loan for a home with major issues like mold, structural damage, or roof leaks until those issues are addressed. So a home inspection that reveals those types of issues can really throw a wrench into the process.
  
  Avoid that problem by having major maintenance issues addressed before it's time for inspection, and you'll have an easier time selling your home. Even if you don't wind up selling to an FHA buyer, addressing those types of issues will make the home more appealing to any buyer.
  
  
• Know the Rules of FHA Appraisals
  While the buyer has the option of also hiring their own appraiser to look at the home, the FHA relies only on the report from its own appraiser when making decisions. Simplify the process by making things easier for the FHA appraiser, and providing easy access to all parts of the home. FHA appraisers are thorough, so if you have an attic or crawlspace make sure that they can get there easily to take the necessary photos.
  
  
• Offer to Help the Buyer with Closing Costs
  For FHA buyers, covering closing costs can often be the last major hurdle before purchasing a home, so offering to help with closing costs can make selling your home easier. The FHA allows sellers to cover up to 6 percent of the home's total sale price, in order to help buyers with closing costs.
  
  
• Pick a Real Estate Agent Who Understands FHA Loans
  Choosing the right real estate agent is always a key consideration when selling your home, and an experienced agent should already have extensive knowledge of the FHA loan process. If you have any questions about making your home FHA-friendly in your market, rely on your real estate agent for accurate answers.

The steps to make your home FHA-friendly are relatively easy to handle for most sellers, and can open the bidding to 30 percent more buyers when selling your home. If you have any questions about selling your home within FHA guidelines, the right real estate agent can walk you through every step of the process.

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