Buying a home with an FHA loan is a good choice, because the minimum down payment is usually much less than conventional loans. Many homebuyers may wonder if a home inspection is necessary for an FHA loan. There are rules that must be followed when you get a loan using FHA, (Federal Housing Administration), an agency in the Department of Housing and Urban Development. Although obtaining a home inspection is not necessary for every FHA loan, there are certain cases in which an inspection will be required.
It is important to understand the differences between a home inspection and an FHA appraisal for these special situations, which include buying a home that has been flipped. An FHA loan requires a home inspection for buying rehabilitated homes and for buying manufactured homes once they are set on a foundation.
Differences between a home inspection and FHA appraisal
A home inspection and an FHA appraisal accomplish two different tasks. The inspection’s main purpose is to receive detailed information from a professional about the structure and safety of a property. A list will be made of any necessary or recommended repairs to the property during a home inspection. An FHA appraisal is usually a mandatory portion of the real estate buying process used to determine the value of a property. The appraisal will also help set the limit of an FHA loan.
Required home inspections when flipping a home
Flipping a house refers to the process of buying a property that is in need of repairs and then performing those repairs. Typically the real estate is sold quickly after the flipping process. There was a time when FHA loans were not allowed to be used to purchase a property intended to be flipped. The FHA now allows flipped houses to be purchased with an FHA loan with a required home inspection and two independent appraisals.
Required home inspections for buying rehabilitated homes
The FHA has a special program for properties that require a significant amount of repairs or rehabilitation. The 203(k) program allows a homebuyer to purchase real estate that needs work by allowing funds for the repair to be held in escrow. However, a home inspection is required before and after the repairs are complete in order to secure an FHA loan for rehabilitated homes.
Required home inspections for buying manufactured homes
Manufactured homes are units that are produced off-site and transported to a lot. A home inspection is not required for the purchase of the unit. However, an inspection is required for an FHA loan to be used once the house is set on a foundation.
If you would like more information about buying real estate, contact the experts at Elite Real Estate Group in Amarillo, Texas. Call us today at (806) 337-0883 or Contact Us by email to learn more. You can also View Our Listings to see the real estate we have available in the Texas Panhandle.