Why FHA and VA?
Why does seller need to understand FHA and VA for sellers. In order to intelligently compare two offers you need a bit of understanding of different loan types.
FHA is especially important to first-time home buyers and those with small down payments because it allows borrowers with good credit to make a down payment as low as 3.5% of the purchase price.
Veterans can get a VA loan for 0% down.
FHA and VA Appraisers
FHA and VA only rely on reports by its approved appraisers. FHA and VA will not give the okay to buy the home until you repair serious defects like roof leaks, mold, structural damage, and pre-1978 interior or exterior paint that could contain lead.
Help with FHA and VA closing costs
Most FHA and VA buyers need help with closing costs. So a prime way to make your house FHA/VA-friendly is to help with those costs.
FHA currently allows sellers to pay up to 6% of the sales price to help cover closing costs.
VA does not allow the buyer to pay certain closing costs. As a result the seller will net less cash with a buyer that has a VA loan.
If you’re selling a condo
FHA also has to approve your condo before a buyer uses an FHA loan to purchase your unit. Be sure your condo is FHA-approved for mortgages. The list has been updated, so if your association was approved a year ago, check again to make sure it’s still on the approved list.
FHA generally won’t insure loans in condo associations if more than 15% percent of the unit owners are late on association fees. Ask your property manager or board of directors for your association’s delinquency rate.
Other rules cover insurances, cash reserves and how many units are owner-occupied and the types of condos that can be purchased with an FHA mortgage.