We Tell it Like It Is

FHA is a loan commonly used by first-time homebuyers. It requires the least amount of down payment (3.5% of the home price), which is the primary perk, and that makes FHA awesome.

HOWEVER...its a government-insured loan versus a privately-insured loan...the money comes from the government versus a private lender/bank. The government has a lot more requirements than private lenders have when it comes to giving out money for homes that are in need of some work.

FHA buyers have been experiencing a lot of frustration out there lately because a lot of inexpensive homes on the market (primarily foreclosures) are in halfway decent shape (well, a matter of opinion) but are not FHA fundable. FHA requires certain things to be in nearly flawless shape (again, in my opinion) before they will grant a buyer a loan or even consider accepting an offer w/an FHA loan.

Some of the things that FHA will see as issues in a home and either make a buyer fix or flat-out turn them down for a loan:

--Windows that are original to the home (if the home is older).

--Windows that are broken, have rotting wood, or chipping paint around them. Windows that have broken seals and are drafty or have condensation.

--Peeling/chipping paint anywhere

--any plumbing issues

--Electrical wiring that is exposed

--Snow on a roof

--loose stairs, decks, railings

--deteriorating doors, garage doors