When you're buying a home, you have several loan options, depending on your credit rating, home buying history, and choice of home. One option is a loan backed by the Federal Housing Administration (FHA). Metro Appraisal Associates, one of the top providers of real estate appraisal services in Greater Rochester, NY, explains below how an FHA mortgage works and what it means to be FHA approved. Since 1974, Metro Appraisal Associates has helped homebuyers and investors determine the value of a property before a purchase or during a bankruptcy or tax review.
A Guide To Being FHA Approved
The Basics Of FHA Mortgage Backing
An FHA-insured loan makes it easier for people to get funding for a real estate purchase. As part of the loan, the borrower pays for insurance that protects the lender if the borrower defaults on the loan. However, the FHA won't insure every loan — to qualify, the lender and the property must be FHA approved.
Banks and mortgage companies must be FHA approved to qualify as a lender in the FHA loan program. To get approval, they must submit the company's partnership agreement or articles of incorporation (the legal documents that created the company) as well as several financial documents, including a business credit report and the credit reports of its owners and officers.
To be FHA approved, the house you want to purchase must undergo an appraisal by an FHA approved service. The appraiser values the house and notes problems, such as unsafe stairs or broken windows, that must be repaired before the loan will be approved. If the house is worth less than the loan amount, the mortgage won’t be approved.
For a condominium purchase, the appraiser also must approve the condo community. For instance, if too many community members are late paying dues or more than half the units are rentals rather than owner-occupied, the FHA won't approve the mortgage.
Metro Appraisal Associates hires only the most skilled certified appraisers, and the company’s 40 years of industry experience gives it the expertise you want when appraising an important purchase. Visit their website for more information, or call (585) 225-3042 to speak with a friendly, knowledgeable professional about their real estate appraisal services.