Should I Accept an FHA Offer on my Duplex?


FHA Offers & Duplexes

It's important to understand FHA offers and how they relate to your property. In some cases, you might be right to accept an FHA offers, in other cases, you'll certainly want to decline.In this article, we'll be looking into all of the things you should consider before accepting an FHA offer.Before we dive in here, we just want to note that - when you work with us - we can help you to walk through getting and accepting the best possible offer for your duplex. We’ll prepare you so that you can maximize your duplex listing price - regardless of the financing type.We’re the #1 buyer and seller of duplexes in Minneapolis and the Twin Cities as a whole – this is what we do, and we’ll guide you towards getting the best possible result from selling.

Is it a Good Idea to Accept an FHA Offer Over Other Offers?

If you’re looking to get the highest price for your duplex listing in Minneapolis or St. Paul, you need to gear towards a duplex buyer intending to owner-occupy. Owner-occupiers pay more for their duplex in exchange for certain features - check out our advice on how to get top dollar for your duplex.Some of the highest offers you’ll see for your duplex listing might be from FHA financing.Duplexes financed by an FHA loan can be purchased with as little as 3.5% down, even if it’s a triplex or fourplex you’re buying rather than a traditional duplex. The primary condition for using FHA financing is that the buyer must owner-occupy.

Remember how an FHA loan works:

  • A Regular Bank will Lend
  • HUD Will Insure the Loan
  • The Cost of the Insurance is Paid as a Premium by the Buyer (PMI)
  • FHA then has Minimum Requirements in Order to Approve the Financing and the Insurance

This is a program that allows homebuyers that might not have a capital gain from a previous sale to come up with a down payment.There’s a chance your property doesn’t meet the minimum FHA requirements.Skip down near to the end of this article for more in depth information about the FHA requirements - but let’s dive into the question at hand: Should you be skeptical of FHA offers?Your property needs to be appraised - and safe to live in.  So FHA sends a checklist to make sure it’s safe.Here’s what we’ve noticed…You should take a look at the list below before you sell to determine if you’re at risk that your property will fail to reach the FHA minimum requirements.  Usually, it’s a matter of putting handrails in stairways, fixing some grading, or at worst - paying for lead paint removal.We wouldn’t recommend shying away from an FHA offer because you’re scared of failing the FHA minimum requirements. That said, some properties are truly too far away from FHA requirements to even consider making the changes necessary to qualify.If you think this  may be the case for your property, we'll help you to determine that before you make the mistake of heading too far down the road to turn back easily. If it's practical to make changes, we may recommend them, but if it's not, we'll help you to calculate more feasible ways to earn top dollar.The key is to prepare yourself, make wise decisions after doing your homework, and start your listing process with The Duplex Doctors!Since the federal government will be providing insurance for an FHA property, they’ve created a set of FHA standards that must be satisfied in order to approve the loan.This requires an official inspection.What are the official FHA requirements?According to HUD, there are requirements for FHA financing, as single family homes of two, three or four units - read about it here.

FHA Appraisal Checklist:

  • The Property must be Complete and Marketable
  • Heating System must be Adequate for the Home
  • No Lead-Based Paints
  • Wiring Doesn’t have Any Exposed Portions
  • Undamaged, Full Exterior Walls
  • Hazard-Free
  • Construction is Quality
  • Drainage is Properly Sloped
  • The Roof Isn’t in Need of Repair
  • Safe Accessibility
  • Safe Drinking Water
  • Naturally Ventilated Crawl Spaces
  • Electric, Sewage, and Gas is Available

Changes in FHA Appraisals for 2017

As with many federal regulations, the requirements have grown recently.  The laws were revised and updated to increase the minimum property standards or “MPS,” and they went into effect on 9-14-15. Read more about the HUD 4150.2.

The 2017 FHA Requirement Changes Include:

  • Ensuring the Appliances are Operational
  • Full Access to the Attic Space if Able to Do So
  • Checking that the Water Heater is Functional
  • Inspection Portion is Not Really an “Observation”
  • Need to Report Recently Replaced Roofs (in the Last Two Years)
  • Airport Zones and Marketability Analysis
  • Income Appraisals were Tweaked

The Lenders Network has a great summary of these FHA requirements and their changes, you can read more about it by clicking here. Remember, working with experienced agents that have dealt with these tensions is the best way to handle the FHA financing offers.

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